FTSE Plunges as ECB Raises Rates Amid Escalating Middle East Tensions
The FTSE 100 fell sharply into losses on Thursday as the European Central Bank raised interest rates by 25 basis points, taking the deposit rate to 2.50%. The move was expected, but it failed to provide clarity on future rate hikes.
Escalating tensions in the Middle East pushed oil prices above $105 a barrel, with Brent crude surging 3.94% to $105.22 and WTI climbing 4.06% to $99.97.
The Houthi forces' seizure of the Yemeni Red Sea city of al-Makha and projectiles striking Iran's southern coastline have raised concerns about disruptions to global shipping routes, including the Strait of Hormuz.
ING analysts warned that any meaningful disruption to Hormuz flows could tighten the market 'more sharply' than recent weeks have implied, keeping upside pressure firmly in place.