London Stocks Fall as Oil Prices Surge Above $105

Stocks in London fell on Thursday as oil prices surged above USD105 and hotter-than-expected US producer inflation fueled concerns about global energy supplies and inflation. The FTSE 100 index dropped 61.14 points, or 0.6%, to 10,608.92, while the Cboe UK 100 was down 0.5% at 1,054.91.

The European Central Bank raised interest rates as expected, taking the deposit facility rate to 2.50%, the main refinancing operations rate to 2.65%, and the marginal lending facility rate to 2.90%. The ECB's latest staff projections forecast headline inflation averaging 3.0% in 2026, 2.5% in 2027, and 2.1% in 2028.

Oil prices rose due to intensifying military action between the US and Iran, which fueled concerns about disruptions to global energy supplies. The rise in oil prices also contributed to inflationary fears already weighing on markets.