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The London stock market experienced a positive turn today, with the FTSE 100 index rising by 50 points, or 0.5%, following a significant drop of 2.35% yesterday. This uptick is largely attributed to a temporary easing of tensions in the Middle East, as Israeli Prime Minister Benjamin Netanyahu agreed to postpone attacks on Iranian gas fields, a move influenced by requests from former President Donald Trump.
Despite the decrease in oil and gas prices, UK inflation is anticipated to rise this summer. Sanjay Raja, chief UK economist at Deutsche Bank, forecasts inflation could exceed 3%, diverging from the government's target of 2%. The ongoing conflict in Iran has already led to energy prices surging, with oil prices nearly 50% higher than pre-conflict levels and gas futures up by approximately 90%.
Raja notes that the current inflation outlook is particularly uncertain, and while government support measures may help mitigate energy inflation, the overall economic impact remains significant. As the situation develops, market reactions will likely continue to be influenced by geopolitical headlines rather than historical trading patterns.
Source: www.theguardian.com – https://www.theguardian.com/business/live/2026/mar/20/demand-destruction-fears-iran-war-oil-and-gas-prices-uk-government-borrowing-jumps-latest-news-updates