Oil Price Surge Sends UK Borrowing Costs Soaring

The UK's FTSE 100 index fell to a two-month low on Tuesday due to rising oil prices, which is driving up borrowing costs and affecting household demand.

The blue-chip index dropped 0.59% to 10,634.49 by 1000 GMT, while the FTSE 250 lost 0.46%. Banks and investment firms led the decline, with Standard Chartered down 1.7% and Aberdeen off 2.6%.

Precious and industrial-metals miners also weakened as gold and copper prices fell.

AJ Bell's Danni Hewson noted that rising oil prices are becoming harder for UK consumers to absorb, and would be firmly in focus when the Bank of England meets this week.