BRUSSELS (dpa-AFX) - UK stocks are down firmly in negative territory Thursday morning, weighed down by inflation concerns following an escalation in tensions in the Middle East after fresh strikes by Iran on Persian Gulf oil-and-gas infrastructure.
Following attacks by Iran on energy facilities in the Middle East, including the crucial South Pars gas field, Brent crude futures surged above $119.00 a barrel earlier in the day, and despite dropping a bit to $114.50, remains high up (nearly 6.5%) over previous close.
A hawkish tone by Federal Reserve Chair Jerome Powell is hurting as well. After leaving interest rates unchanged, Powell said in his post-meeting press conference on Wednesday that the U.S. is seeing 'some progress on inflation' but 'not as much as we had hoped.'
Powell warned that 'you won't see the rate cut' if there isn't further progress on inflation because of the broader uncertainty linked to the Middle East conflict and President Trump's tariffs.
Meanwhile, investors are awaiting the Bank of England's monetary policy announcement. The European Central Bank's policy announcement is also due in a while.
UK's equity benchmark FTSE 100 is down 213.40 points or 2.07% at 10,091.89 nearly half an hour before noon.
Bank and miners are among the major losers.
Natwest Group is plunging 7.6%, Standard Chartered is down 6.5%, Barclays is declining by 4.5%, Lloyds Banking Group is down 3.2% and HSBC Holdings is down by about 3%.
M&G, a global savings and investment company that manages assets for individuals, institutions, and pension schemes worldwide, is down more than 7%, weighed down by concerns about the impact of the ongoing war in the Middle East.
Miners Fresnillo and Anglo American Plc are down 7.6% and 7.2%, respectively. Antofagasta is down 7%, Endeavour Mining is declining by 6.8%, Rio Tinto is down with a loss of 5% and Glencore is down 3.2%.
Weir Group, Rolls-Royce Holdings, Melrose Industries, Croda International, Easyjet, Howden Joinery, Barratt Redrow, IAG, Hikma Pharmaceuticals, Convatec Group, Burberry Group, Spirax Group, Persimmon, Whitbread and 3i Group are down 3%-5%.
Among the gainers, BP is up 2.2% thanks to a sharp surge in oil prices. Centrica and BT Group are up with modest gains.
In economic news, the U.K. unemployment rate remained unchanged and wage growth eased in the three months to January, the Office for National Statistics said.
The jobless rate held steady at 5.2% in the November to January period. Job vacancies decreased 6,000 to 721,000 compared to the previous three months ending November.
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