FTSE 100 Slumps as ECB Rate Hike and Soaring Oil Prices Weigh on Markets

The FTSE 100 index fell as the European Central Bank (ECB) raised interest rates, adding to the pressure on investors across European equity markets. Oil prices surged above $105 per barrel, further exacerbating economic strain and consumer confidence.

Energy-importing economies are particularly vulnerable when crude prices spike, as higher fuel costs feed through to inflation and reduce household and business spending power. The ECB's decision to raise rates reflects its ongoing battle against persistent inflation across the eurozone, a policy path that has drawn both support and criticism from economists.

The increased borrowing costs in the eurozone tend to dampen investor appetite for equities, making safer fixed-income assets more attractive by comparison. London's blue-chip index closely tracks global sentiment, and significant policy shifts from major central banks like the ECB quickly ripple into UK markets.