FTSE pares some of its losses with oil back to $100 as naval blockade of Strait of Hormuz

The price of oil shot back above $100 a barrel on Monday as Britain’s battered economy lurches towards stagflation and recession.

In another rocky session on financial markets, Brent crude rose as much as 9 per cent to almost $104.

The jump in the oil price, which took its toll on global stock markets with the FTSE 100 closing down 17.57 points at 10,582.96, sparked warnings that Britain faces a painful bout of stagflation and even recession.

Stocks have pared earlier losses as oil slipped to $100 a barrel, having reached $103 earlier today, amid reports of an Iran deal.

Iranian officials are considering abandoning uranium enrichment, a key part of the US proposals, to bring an end to the conflict, according to the New York Times.

The FTSE is down just 20 points to 10,575, having fallen around 60 points at lunchtime. In the US, the S&P 500 jumped around 20 points to 6,820 following the report, while the Nasdaq is up 33 points to trade up 0.15 per cent.

Richard McDonald, Investments Analyst at IG said: ‘Investor sentiment continues to lean toward the prospect of a diplomatic resolution, even as energy markets signal lingering uncertainty. Oil prices remain elevated, up roughly 4.5% since Friday, highlighting the tension between optimism in equities and caution in commodities.’

US stocks slipped as oil remained trading above $100 a barrel ahead of Trump’s naval blockade of the Strait of Hormuz.

The Dow Jones is down 0.52 per cent, or 250 points, while the Nasdaq index is 0.34 per cent lower. The S&P 500 is essentially flat.

The competition regulator is reportedly eyeing a probe into Paramount’s planned takeover of Warner Bros.

The Competition and Markets Authority told news agency Reuters it was ‘important we assess whether deals between studios may harm competition… We expect to launch our phase 1 investigation in the coming weeks’.

It had previously sought views on whether the deal complied with competition rules, which is standard procedure before the CMA decides on whether to formally launch an investigation.

Paramount triumphed in the battle for Warner Bros, beating Netflix which had appeared to be in prime position to succeed with its £60million offer.

Warner’s board declared Paramount’s to be the ‘superior offer’ at the end of February.

It’s been a fairly steady morning for the FTSE 100, which is trading down 45 points at 10,554.

As the deadline for the latest blockade of the Strait of Hormuz looms, the blue-chip index has been cushioned by gains across energy giants BP and Shell, which are up 1.3 per cent and 1.5 per cent, respectively.

Heathrow reported its busiest March in history but has warned of uncertainty as the Middle East conflict disrupts travel.

The airport said there had been a 10 per cent spike in transfer passengers following disruption to routes, but the outlook for the next few months is ‘uncertain’ amid concerns over fuel supply.

It said that while the impact of the war on supply chains, including fuel, had not affected operations, it would ‘monitor the situation and liaise with Government and airlines’.

CEO Thomas Woldbye said: ‘We’re doing everything we can to support airlines and passengers as travel trends shift during the Middle East crisis. While Heathrow’s long-haul network absorbed demand in March, the outlook for the next few months remains uncertain. I’m proud of what colleagues have achieved to quickly adapt and continue giving passengers a great service during difficult times.’

While 6.6million passengers travelled through Heathrow last month, analysts warn that numbers are likely to fall in the coming months.

Russ Mould, investment director at AJ Bell said: ‘There is a real risk that Heathrow’s busiest March in history is as good as it gets for the airport for the foreseeable future.

He added: ‘With the Middle East crisis still ongoing despite a temporary ceasefire, there remains considerable uncertainty over the supply of oil and that is bad news for Heathrow. The longer the uncertainty lingers, the greater the chance that holidaymakers choose to stay at home and that could lead to a summer slump for the aviation industry.’

After rising about 8 per cent to $103 a barrel overnight, brent crude has pared gains to trade at about $101.

‘There is clearly a geopolitical premium for oil this week and it will continue to be exposed to volatility and abrupt shifts,’ says Saxo’s Neil Wilson. ‘The worst-case tail risk of the war is receding still even if we have plenty of noise that’s showing up chiefly in spot energy markets.’

Equity markets have been more muted in their reaction, with the FTSE 100 down x per cent by 9am.

‘The assumption is also that we see a TACO – Trump’s usual tactic of threatening to escalate in order to negotiate,’ says Wilson.

The number of people looking for work has risen sharply after a wave of redundancies and ‘muted’ job market.

A report by auditor KPMG and the Recruitment & Employment Confederation (REC) found ‘demand for workers continued to weaken’ last month.

Experts warned the conflict in the Middle East could delay any recovery – fuelling fears of further rises in unemployment from the current five-year high of 5.2 per cent.

Money transfer firm Wise has said it is on track to move its primary listing from London to Nasdaq this quarter after announcing its plans last June.

It came as the fintech beat expectations in the fourth quarter, with underlying income increasing 24 per cent to £435.3million.

In a statement, Wise said: ‘We believe that the addition of a primary US listing would bring a number of strategic and capital markets benefits to Wise and its owners, including greater visibility in the United States, the biggest market opportunity for our products today, and better access to the world’s deepest and most liquid capital market.’

Shares in Vistry fell as much as 3.5 per cent at the open following the appointment of a new CEO.

The housebuilder said Adam Daniels, already a member of Vistry’s executive team, will take the helm immediately. Rob Woodward will take up the role of chair.

It comes just weeks after the FTSE 250 firm said Greg Fitzgerald will retire next year, after which the chair and CEO roles will be separated.

Oli Creasey, head of property research at Quilter Cheviot, said: ‘While the transition of both roles has been well-flagged, the timeline comes as a surprise, with the search for the new CEO in particular guided to take until March 2027 at the latest.

While investors may be reassured to see the transition not drag on, and see a well-respected internal candidate take on the CEO role, they may also be confused as to why guidance was provided just over a month ago that the search might take up to a year to complete, especially as Vistry now tell us that a “multi-year CEO succession plan” has already concluded.’

The sooner-than-expected transition follows a difficult period for the builder, which warned last month that profit margins would remain under pressure as higher costs, planning delays and muted demand weigh on the market.

The FTSE 100 has opened down 60 points, or 0.58 per cent, at 10,536, as brent crude sits at $101.28 a barrel.

Richard Hunter, head of markets at Interactive Investor said: ‘Inflationary concerns are therefore back on the table, and other commodities such as fertiliser also rose on supply concerns. It now remains to be seen whether the US President’s latest threats will be enforced, with the muted market reaction thus far implying that it could turn out to be a negotiation tactic.’

Associated British Foods is down 2.29 per cent following a broker downgrade, while miners Fresnillo and Endeavour Mining slipped as gold tracked lower.

Hunter added: ‘As with most global peers, the main UK indices will remain rangebound until there is some evidence of a sustained solution to the Middle Eastern impasse.’