UK's main indexes drop 1% on Middle East uncertainty

Thu, 26th Mar 2026 10:29

March 26 (Reuters) - London's FTSE indexes dropped more than 1% on Thursday, as lingering uncertainty about ‌a potential end to the Middle East conflict weighed on sentiment.

U.S. President Donald Trump said Iran ⁠was desperate to reach a deal to end nearly ⁠four weeks of fighting, contradicting Iran’s foreign minister, who said Tehran was reviewing a U.S. proposal but had no plans to enter talks aimed at winding down the conflict.

The blue-chip FTSE 100 index fell 1.1% by 1013 GMT, snapping ‌a two-day winning streak, while the midcap FTSE 250 fell 1.2%.

* Most FTSE 350 sub-indexes traded in the red, except the energy index, which gained 0.6% as oil prices clawed back losses from the previous session on worries that prolonged fighting in the Middle East could further disrupt energy flows.

* Precious metal miners fell 4.4% as gold prices weakened ‌amid uncertainty surrounding the conflict.

* Britain's economic growth prospects this year received the sharpest downgrade of any major economy in ‌the OECD's interim forecast update following the U.S.-Israeli war on Iran, while inflation is set to rise faster too.

* Markets have priced in two or three quarter-point hikes from the Bank of England this year, a sharp reversal from earlier this year when investors were expecting rate ‌cuts.

* Next rose 5.1% to the top of the benchmark after CEO Simon Wolfson said that the clothing retailer has not seen a noticeable drop off in UK sales since ⁠the U.S.-Israeli ⁠war on Iran started at the end of February.

* Currys ‌fell 8.4% after the electrical retailer said CEO Alex Baldock will step down, ending a tenure that delivered a turnaround in profit and margins for the company.

* 3i Group fell 7.6% ‌after the private equity firm said that its discount retailer Action expects like-for-like sales growth between 4% and 5% in 2026, broadly similar to the 4.9% growth it recorded in 2025. (Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Sahal Muhammed)