UK stocks extend losses as oil surges

The blue-chip index FTSE 100 dropped 1.6% and the British GBP/USD declined 0.8% against the dollar to 1.3306

British stocks extended losses on Monday, entering another week under pressure as escalating tensions in the Middle East pushed oil prices above $100 per barrel, with European markets also in the red and the pound trading at $1.33.

As of 08:36 GMT, the blue-chip index FTSE 100 dropped 1.6% and the British GBP/USD declined 0.8% against the dollar to 1.3306. DAX index in Germany shed 2.3%, the CAC 40 in France down 2.6%.

Jefferies analysts are focusing on European and UK rate markets, where current pricing suggests more than 1.5 rate hikes from the European Central Bank and less than one cut from the Bank of England in 2026.

The firm believes recent movements in front-end rates have been driven primarily by position squaring rather than shifts in inflation expectations.

Jefferies maintains a base case of no policy changes from the ECB this year. Despite the recent increase in oil prices, the firm’s outlook leans toward potential rate cuts rather than hikes if any action is taken.

The analysts view the oil price shock as an external event that should not trigger a central bank response unless crude remains above $100 per barrel for an extended period and second-round effects emerge in the economy.

Brent Oil Futures traded at $104.31 as of 08:41 AM GMT on Monday.

If oil prices fall back below $80 within a three-month timeframe, Jefferies does not anticipate any impact on ECB policy decisions.

M&C Saatchi said Monday that Chief Executive Officer Zaid Al-Qassab will step down from his position and leave the board on March 31, 2026, by mutual agreement with the company.

Dame Heather Rabbatts, currently serving as Non-Executive Chair, will assume the role of Executive Chair on an interim basis until a new Chief Executive Officer is appointed. The company said it will initiate a comprehensive formal search process to identify a replacement.