March 20 (Reuters) – London’s FTSE100 marginally fell on Friday, set for a third consecutive weekly decline, as the escalating Middle East war and surging oil prices deepened inflation fears and cemented expectations for the Bank of England to hike interest rates.
The blue-chip FTSE 100 fell 0.1% by 1039 GMT, while the mid-cap FTSE 250 was up 0.2%.
Both indexes swung between losses and gains through the session, reflecting the choppy and uncertain mood across markets.
Oil prices nudged higher on Friday despite leading European nations, Japan and Canada offering to join efforts to secure safe passage for ships through the Strait of Hormuz, and the U.S. outlining moves to boost supply. [O/R]
UK’s energy stocks slipped 0.9%, but was still around record-high levels.
Heavyweight pharma stocks fell 0.3%.
The BoE held rates at 3.75% at Thursday’s policy meeting. Its warning that inflation posed a bigger risk than slowing growth pushed traders to price in a roughly 60% chance of a 25-basis-point hike by April and potentially up to three quarter-point increases by year-end.
Fresh fiscal concerns rose after Britain borrowed far more than expected in February, partly due to volatile debt-interest payments, just as the Iran conflict drove up funding costs and fuelled calls for higher public spending.
Among other movers, Unilever shares inched 0.9% up after the consumer goods giant confirmed it was in talks with U.S.-based McCormick & Company about selling its foods business.
Smiths Group dropped 7.9% after the engineering group missed half‑year organic revenue forecasts.
JD Wetherspoon fell 12.3% after the pub chain said that its full-year profits may fall below market estimates after higher energy costs and wage-related taxes dragged first-half profit down by 37%.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Harikrishnan Nair)
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