FTSE 100 Live: FTSE 100 slides as ECB raises rates and oil surges above $105

London stocks weakened through the session as surging oil prices and renewed inflation worries overshadowed sentiment. A rate hike from the European Central Bank and higher global bond yields added to pressure, while Wall Street opened lower amid concerns over tighter policy and costlier energy.

• FTSE 100 down 36 points at 10,634
• FTSE 250 down 197 points at 23,912
• Wall Street opens lower as oil tops $105
• Gold down $54 to about $4,361 an ounce

Afternoon slide as oil and yields bite

After a brief midday rebound, the FTSE 100 extended losses into the afternoon, slipping 36 points to 10,634. The FTSE 250 fell 197 points to 23,912, trading near session lows as energy-driven inflation fears weighed on rate-sensitive sectors.

Brent crude jumped nearly 4% to around $105.18 a barrel, with supply concerns intensifying after further disruptions in the Middle East. The move reignited worries that higher fuel costs will filter into broader prices and keep interest rates elevated for longer.

Safe-haven demand faltered as rising yields lifted the opportunity cost of holding gold. Spot prices dropped about 1.2% to $4,360.51 an ounce. US 10-year Treasury yields rose to roughly 4.83%, while UK 10-year gilt yields climbed to about 5.34%.

In the US, producer prices for August came in ahead of expectations, reinforcing the risk of further policy tightening from the Federal Reserve. Major US indices opened lower, with technology names lagging as yields rose and oil remained elevated.

ECB lifts rates; European reaction muted

The European Central Bank increased its deposit rate to 2.5%, its second hike this year. Equity markets across the continent were mixed, with higher government bond yields maintaining a cap on risk appetite. The rate move arrived alongside already fragile sentiment linked to energy costs and sticky inflation dynamics.

Market breadth and notable movers

Market breadth remained negative, with a greater share of FTSE 100 constituents in the red. Energy names offered some support as crude held above $100, but broader sectors struggled under the weight of inflation and rate concerns.

• BP and Shell advanced around 1% as stronger oil prices improved revenue expectations for producers. Harbour Energy climbed about 3%.
• Energean eased roughly 4% after a sharp rally the previous session; earlier production was affected by a 41-day shutdown in Israel, though guidance was maintained.
• Whitbread rose around 1.5% to 2,355p, with steady intraday trade providing a pocket of resilience.
• Genus fell about 5.5% despite reporting robust preliminary results for the year to 30 June 2026.

Broker calls and corporate updates

• Housebuilders: Persimmon rated ‘buy’ with a target of £13.25; Barratt Redrow also rated ‘buy’ with a £3.70 target.
• Retail: Boohoo upgraded to Add, with the price target raised to 30p following a strategic disposal.
• Electricals: Currys retained at ‘buy’ with a 200p target on strong early trading and operational leverage.
• Beverages: Fevertree reiterated at ‘buy’ with a 1,100p target, citing US momentum and earnings potential.
• Pharma: Positive lung data for AstraZeneca’s tozorakimab was acknowledged, though an overall cautious stance on the shares remained.

Early trade: AB Foods drags, defensives mixed

At the open, the FTSE 100 attempted to stabilise after a four-session losing streak but soon drifted lower. Associated British Foods slumped close to 10% as a 3% decline in Primark’s fourth-quarter like-for-like sales in continental Europe and a weaker outlook for the Sugar division overshadowed plans to launch home delivery in Great Britain. Computacenter fell around 3%, and M&G slipped 2%, while Compass gained about 2% alongside modest rises in Abrdn and Whitbread.

Sterling edged up to roughly $1.355, limiting the translation boost for internationally focused UK large caps.

Global backdrop: oil-led inflation worries

Before the open, FTSE 100 futures were broadly unchanged around 10,669 after Wednesday’s 142-point decline. Brent crude held above $100 and West Texas Intermediate traded near $96, intensifying pressure on energy-intensive sectors such as airlines, retailers, and manufacturers, even as integrated oil producers outperformed.

On Wednesday, Wall Street posted a third straight drop, with consumer-facing shares lagging and the Russell 2000 underperforming as smaller companies’ exposure to higher financing and operating costs drew scrutiny. Asian markets followed the US lower, with indices in Australia, Japan, and South Korea all slipping.

Elsewhere in commodities, copper hovered near record territory, supported by tight supply and infrastructure demand, while gold steadied near $4,399 an ounce ahead of key US inflation releases. Bitcoin traded around $78,500.

What to watch

Attention remains on central bank signals and inflation data. In Europe, the latest ECB move underscores the focus on stubborn price pressures. In the US, producer prices and weekly jobless claims precede consumer inflation figures due Friday. In the UK, expectations that the Bank of England may need to keep policy tight have nudged sterling higher, a headwind for FTSE multinationals.

On the corporate front, trading updates and results from Associated British Foods, Currys, Genus, Playtech, and THG punctuated the session. With oil above $100 and bond yields elevated, sector rotation and stock-specific news continue to steer intraday direction.