By ANGHARAD CARRICK, BUSINESS NEWS EDITOR and HUGO DUNCAN, BUSINESS EDITOR

Updated: 13:14 EDT, 26 March 2026

The FTSE 100 tumbled as oil raced higher as hopes of a de-escalation in the Middle East faded once again.

On another bleak day for investors, London’s blue chip index closed down 134.67 points or 1.33 per cent at 9972.17.

Crude topped $109 a barrel as Iran dismissed reports of direct talks with Iran. 

‘Investors look like they’re fed up with the hot and cold messages around Iran peace talks,’ said Dan Coatsworth, head of markets at AJ Bell. ‘Recent market optimism about a resolution in the Middle East is fading fast.’

Elsewhere, NS&I may face a £400million compensation bill and Next’s boss has warned on prices due to the Iran war. 

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National Savings and Investments is poised to pay compensation to some savers after a series of blunders at the state-backed bank.

NS&I said it estimated that up to 37,500 bereavement claims with a total value of up to £476million in customer deposits may have been affected.

NS&I chief executive Dax Harkins was

dismissed this morning as a result of the fiasco. Sir Jim Harra has been appointed as chief executive on an interim basis.

In a statement to the House of Commons on Thursday, pensions minister Torsten Bell said the government would ‘ensure the appropriate compensation’ is paid to some affected customers.

Another tough day on financial markets

With less than 90 minutes of trading to go, the FTSE 100 is down around 1.2 per cent or 120 points at 9985.

It’s been another tough day for investors as the Middle East conflict pushes oil up to $107 a barrel.

And as if the OECD downgrades were not enough bad news for the Chancellor, ten-year gilt yields are well over 4.9 per cent.

Labour is pushing up energy bills, says M&S

The boss of Marks & Spencer has accused Labour of pushing up energy bills.

Stuart Machin, who runs one of Britain’s biggest High Street chains, said that government levies now make up more than half of the retailer’s energy costs.

‘I always forget the last one’: Minister’s investment gaffe

Labour investment minister Lord Stockwood suffered an embarrassing lapse at a major business conference today when he failed to name all eight of its priorities as part of the industrial strategy, writes John-Paul Ford Rojas.

Stockwood, a former chairman of Grimsby Town football club who joined the government last September, made the blunder at an event hosted by the British Chambers of Commerce in London.

Boasting of the industrial strategy, he said it was the first ‘of this depth’ since the 1960s.

He said the strategy covered ‘defence, creative industries, digital technology, life sciences, professional services, legal services, clean energy and I always forget the last one’.

Chancellor’s house is ‘built on sand’

Professor Joe Nellis, economic advisor at accountancy firm MHA, has weighed in on the OECD forecasts.

‘Events in the Middle East have shown the Chancellor’s house to be built on sand,’ he says.

‘The key question now is how the Government will respond to weaker growth, higher inflation, and volatile financial markets, while protecting the most vulnerable from the most damaging effects of this crisis.’

Those OECD forecasts in full

And here is how the G7 is now expected to fare this year…

Growth down and inflation up…

This handy graphic shows the extent of the OECD downgrades to the UK economy today.

Growth forecasts for the year have been slashed by 0.5 percentage points to just 0.7 per cent while inflation is up by 1.5 percentage points to 4 per cent.

OECD’s bleak verdict on UK economy

So how prepared are we for the energy price shock emanating from the conflict in the Middle East?

Not every, if the OECD’s latest forecasts are anything to go by.

The UK is set to suffer a bigger hit than any other G7 nation with inflation sharply higher and growth weaker.

FTSE 100 crashes back below 10,000

Well, that was short-lived.

Having risen back above 10,000 on Wednesday, the FTSE 100 has fallen as much as 133 points or 1.3 per cent to 9973.83 in early trading today.

‘Investors have eagerly awaited a ceasefire in the Middle East this week but once again there are mixed messages from the US and Iran, leaving markets confused,’ says Dan Coatsworth, head of markets at AJ Bell.

‘Momentum has been lost across the main European stock indices and oil has edged higher, meaning it’s still a waiting game.’

NS&I could be hit with a £400million compensation bill after a series of blunders with savers cash.

Problems included money going missing and issues with bereaved families, with the state-backed bank forced to apologise to customers.

Today, Torsten Bell is expected to address the issue in Parliament.

Consumer confidence ‘collapses’

As this morning’s company updates show, the British high street – already in a perilous state – is facing an almighty hit from the Iran war.

A worrying report from the British Retail Consortium shows consumer confidence in both the economy and personal finances has ‘collapsed’.

Expectations for the state of the economy over the next three months worsened significantly to -53 in March, down from -30 in February.

FTSE opens in the red

The FTSE 100 is down 0.63 per cent, or 63.58 points, to 10,043 as Trump’s attempts to de-escalate the war with Iran fall short.

Any hopes of a Middle East ceasefire or longer-term peace plan seem increasingly distant amid conflicting messages from the US and Iran.

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FTSE closes down 134 points as oil rebounds; NS&I in turmoil – MARKETS CLOSE