Wednesday 04 March 2026 6:45 am
| Updated:
Wednesday 04 March 2026 8:43 am
The FTSE 100 sunk as oil prices spiked amid the war in Iran.
Good morning and welcome back to the City AM liveblog.
Yesterday, Rachel Reeves delivered her Spring Statement.
The Chancellor wheeled out new forecasts from the Office for Budget Responsibility that cut growth for 2026 but – albeit modestly – upgraded it for the years to come.
But forecasts were quickly labelled out of date by economists in the City as the backdrop of the war in the Middle East threatened to wreck inflation estimates and send the FTSE 100 tumbling.
The UK gas price surged to its highest level in three-years on Tuesday after nearly doubling in the space of two days to highs of 165p a therm. It later gave up some gains but finished at 138p a therm – over a fifth higher than Monday’s price.
Meanwhile, oil briefly rose above $85 a barrel for the first time since July 2024.
The frenzy has economists sounding the alarm on inflation.
“A prolonged conflict in the Middle East could trigger a steep rise in UK industrial and residential energy bills when the new energy price is announced on July 1, suggesting headline inflation could rise sharply in the second half of this year,” Raj Badiani, economics director at S&P Global Market Intelligence, said:
And it’s this uncertainty that but bond markets on alert, with the UK’s 10-year gilt yield – a key metric indicating the government’s cost of borrowing – rose around 20 basis points at a peak before falling to finish the day around 10 basis points higher.
We’ll be bringing you the latest as the situation continues to unfold.
Here’s a few of our top stories yesterday:
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Spring Statement Live: UK growth cut for 2026 but Reeves touts future forecasts
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