Shares across the UK and Europe slipped in early trading as escalating tensions between Israel and Iran continued to unsettle investors.
The FTSE 100 dropped 0.4%, with attention turning to the Bank of England’s upcoming interest rate decision. Policymakers are under pressure to weigh the inflationary risks posed by a recent spike in oil prices linked to the Middle East conflict.
In Europe, the Cac 40 in Paris fell 0.8%, while Frankfurt’s Dax was down 0.7%, as Israel and Iran exchanged aerial strikes.
Adding to global uncertainty, former U.S. President Donald Trump hinted at potential American involvement in airstrikes on Tehran, while also claiming Iranian officials were seeking talks. Reuters reported that EU ministers plan to hold nuclear discussions with Iran on Friday.
Meanwhile, the U.S. Federal Reserve kept interest rates unchanged on Wednesday, but Fed Chair Jerome Powell warned of “meaningful” inflation ahead, citing concerns over the Trump administration’s planned import tariffs.
On the FTSE 100, housebuilder Persimmon was the worst performer, down 3.3%, followed by United Utilities. Whitbread also dropped 2.8% after the Premier Inn operator flagged weak domestic demand.
