The leading indexes in the UK experienced their most significant weekly decline in almost a year on Friday, as the intensifying conflict in the Middle East heightened concerns regarding inflationary pressures stemming from surging energy prices. The blue-chip FTSE 100 experienced a decline of 0.1% by 1130, whereas the FTSE 250 remained unchanged. However, both indexes were poised to register their most significant weekly decline since the April 2025 downturn instigated by U.S. President Donald Trump’s “Liberation Day” tariffs.

Shares of oil majors Shell and BP rose nearly 2%, following the trend in crude prices, as the ongoing conflict continued to obstruct shipping and energy exports through the crucial Strait of Hormuz. Qatar’s energy minister anticipates that all Gulf energy producers will cease exports in the coming weeks. In an interview with the Financial Times, he remarked that the action could elevate oil prices to $150 a barrel.

Soaring energy prices have prompted traders to markedly lower their forecasts for interest rate reductions this year, with money market futures currently suggesting merely a 15% probability of a 25-basis-point rate cut from the Bank of England this month, a sharp decline from the 80% likelihood observed before the conflict began. Halifax data indicated that British house prices experienced an increase in February at the fastest annual rate since October, rising by 1.3% year-on-year and exceeding economists’ forecasts. However, the lender cautioned that geopolitical uncertainty and renewed inflation pressures could impede the pace of any interest-rate reductions, tempering the outlook for the sector.

Among other movers, Flutter Entertainment inched up 1.1% after activist investor Parvus Asset Management doubled its stake in the FanDuel-owner. IMI opened a new tab, rising 2% after the specialist engineering firm forecasted mid-single-digit organic revenue growth for 2026, citing resilient demand in its automation segment, and announced a £500 million share buyback programme.