FTSE 100 slips as oil jumps, Iran talks hopes fade

Britain’s benchmark FTSE 100 fell on Thursday, pressured by rising oil prices and fading prospects of renewed US-Iran peace negotiations.

Investors also remained focused on a fresh batch of corporate earnings.

The blue-chip index dropped 0.8% to 10,388.84 points.

Meanwhile, the mid-cap FTSE 250 declined 1.1%, reflecting broader weakness across UK equities.

Oil price surge rattles markets

Brent crude futures climbed above $100 a barrel after Iran tightened its control over the Strait of Hormuz and stated it would not reopen the waterway until the US lifts its naval blockade.

The sharp rise in oil prices added pressure on sectors sensitive to fuel costs.

Travel and leisure stocks were among the worst performers.

Shares of Wizz Air fell 3%, while Carnival declined 2.4%.

The sector faced headwinds from rising operational costs linked to higher fuel prices.

Corporate earnings and stock-specific moves

Travel retailer WH Smith plunged 10.6% after cutting its annual profit forecast and suspending its dividend.

The move signalled growing uncertainty in consumer-facing sectors.

Banking stocks also came under pressure.

Barclays fell 2.1%, while HSBC slipped 0.9%.

Mining companies tracked declines in metal prices.

Fresnillo dropped 6.9%, and Rio Tinto fell 2.1%.

Inflation concerns and rate expectations rise

A survey showed that the share of British firms reporting higher costs rose to a record this month, signalling rising input costs and inflationary pressures.

The data highlighted the economic fallout from the ongoing Iran conflict.

Traders are now pricing in a 70% probability of a rate hike by the Bank of England in June, up from 40% last week, according to LSEG data .

Inflation concerns and energy shock add pressure

Britain’s inflation rate, already the highest among the Group of Seven advanced economies, is expected to rise further.

Investors believe the country is particularly exposed to the surge in energy prices following US-Israeli attacks on Iran that began at the end of February.

The geopolitical tensions have added to existing economic challenges, increasing uncertainty for households already grappling with cost-of-living pressures.

Weekly losses deepen amid geopolitical uncertainty

The FTSE 100 has fallen 2.7% so far this week and is on track to erase most gains driven by earlier optimism over a US–Iran ceasefire, which was announced earlier this month.

Among retailers, Sainsbury declined 5.2% after warning that the Iran conflict could cloud its outlook, mirroring concerns raised earlier by Tesco.

Tesco shares dropped 3% on Thursday.

Select gains provide limited support

Amid broader declines, London Stock Exchange Group gained 1.9% after forecasting annual revenue growth at the upper end of its range.

However, software firm Relx slipped 1.3% despite reaffirming its full-year outlook, reflecting cautious investor sentiment.

Overall, rising geopolitical tensions, elevated oil prices, and inflation concerns continued to weigh heavily on UK markets, limiting any upside from corporate earnings updates.