FTSE Tumbles as ECB Hikes Rates Amid Iran Conflict Chaos

The FTSE 100 index declined by 0.47% on Thursday as the European Central Bank (ECB) raised interest rates as expected, but failed to provide a clear path for future rate hikes.

The ECB increased all three benchmark rates by 25 basis points, taking the deposit rate to 2.50%, but did not commit to further rate increases.

This decision came as energy prices surged due to the escalating conflict in Iran, which intensified inflation risks and pushed oil above $105 a barrel.

The US Producer Price Index (PPI) rose by 0.4% month-on-month in August, matching expectations, with annual rates reaching 5.4%. Energy drove more than three-quarters of the monthly goods increase.