FX.co ★ FTSE 100 Falls to Over 2-Month Low

The FTSE 100 fell more than 2% on Thursday to its lowest level in over two months, as investors reacted to central banks’ assessments of the conflict in the Middle East. The Bank of England left interest rates unchanged in a unanimous decision but indicated that further tightening remains possible if inflation accelerates. The European Central Bank likewise kept rates on hold.

A sharp rise in oil and gas prices weighed heavily on sentiment, overshadowing relatively upbeat labour market figures that pointed to easing unemployment and slower wage growth. Banking stocks led the sell-off, with HSBC, Lloyds, Barclays and NatWest losing between 3.1% and 8.5%.

Blue-chip heavyweights also came under pressure: Unilever slid around 3%, Rolls-Royce nearly 5% and Rio Tinto close to 5%, while Shell, AstraZeneca, BAT and GSK also declined. Losses were broad-based across the index, with BP the notable outlier, gaining more than 4% after agreeing to sell its Gelsenkirchen refinery to the Klesch Group.