Middle East Conflict Sparks Significant Drop in UK Stocks

The UK's main stock indexes experienced their sharpest weekly decline in a year amid Middle East tensions escalating inflation concerns. Brent crude prices surged past $90 as shipping through the Strait of Hormuz remains blocked, affecting the energy sector, while declining U.S. job numbers further add to economic uncertainties.

The UK's primary stock indexes recorded their most significant weekly drop in nearly a year, driven by the conflict in the Middle East which has heightened inflation fears. Economists are closely monitoring the market reaction as investors grapple with these developments.

The blue-chip FTSE 100 fell by 1.2%, and the FTSE 250 decreased by 0.8% on Friday. Both indexes faced their worst week since the April 2025 downturn sparked by U.S. President Donald Trump's 'Liberation Day' tariffs. Meanwhile, shares of major oil companies Shell and BP saw a rise as Brent crude reached over $90 a barrel due to strategic blockages in the Strait of Hormuz.

Anticipating further disruptions, Qatar's energy minister predicts all Gulf energy producers will cease exports soon, potentially propelling oil prices to $150 per barrel. These soaring prices have led traders to scale down expectations for a Bank of England rate cut, reducing the likelihood to a mere 15%. Further compounding the economic anxiety is a decline in U.S. job numbers, signaling potential weaknesses in the global economy.

(With inputs from agencies.)