24 March 2026
Last week, Bank of England ("BoE") Governor Andrew Bailey warned markets against getting excited on rate rises after the Monetary Policy Committee ("MPC") voted unanimously for a steady hand, keeping rates at 3.75%. A conflict-driven energy price surge has caused markets to factor in an interest rate hike by September, with up to three rises anticipated this year due to inflation fears. The UK labour market is concerning: jobless claims rose by 24,700 in February, and wage growth hit a five-year low of 3.9%. Rising energy costs could trigger a new price shock; Cornwall Insight forecasts the price cap will rise by £332 annually in July. Political uncertainty is high as PM Keir Starmer's government faces internal pressure, with former deputy PM Angela Rayner warning that time is running out before the May local elections.
In equities, the FTSE 100 index finished the week to Monday down, landing at 9,894, bringing its year-to-date performance to a loss of 0.57%. Chancellor Rachel Reeves unveiled a £2.5 billion investment in quantum computing and AI to boost growth. This follows worse than forecast February public sector net borrowing (£14.3bn), which, alongside the Iran conflict, threatens her £23.6 billion fiscal headroom. Separately, Reeves plans a reset of EU relations, seeking closer sector-by-sector access by aligning with EU rules.
US economic data was poor, with the February core Producer Price Index (“PPI”) exceeding expectations (highest annualised rate since Jan 2025) and the March Empire State Manufacturing Index missing estimates, though industrial production rose slightly and jobless claims remained low. Major US equity indices fell for a fourth straight week (Dow -2.11%, S&P 500 -1.90%) amid mixed commentary, conflict risks and cautious positioning, including potential private credit withdrawals. AI optimism, however, remained strong after Nvidia highlighted a reported $1 trillion in data centre orders through 2027 and Micron posted robust results. Big Tech was broadly lower, led by Tesla (-5.9%). Treasuries weakened with significant yield curve flattening.
Geopolitical conflict dominated the week as Israel's strike on Iran's South Pars Gas Field prompted Iranian retaliation against Qatar's Ras Laffan Industrial City, damaging the world's largest Liquid Nitrogen Gas (“LNG”) export facility and knocking out approximately 17% of Qatar's LNG capacity. This sparked fears of prolonged disruptions, with Saudi Arabia warning crude could exceed $180/barrel if issues persist beyond April. Despite these fears, WTI crude settled flat, though Brent crude climbed 8.9%. Hints of de-escalation emerged after Israeli PM Netanyahu stated Iran can no longer enrich uranium, and both Trump and he indicated they would avoid targeting Iranian energy infrastructure.
Despite economic uncertainty, the UK housing market remains resilient, with March sales up 5% on 2024 and prices rising 0.8% month-on-month. However, the era of sub-4% mortgages is ending due to inflation concerns and the energy shock, which has pushed the average two-year fixed rate from 4.83% to 5.35%. Further BoE rate hikes could drive rates to 5.75%, potentially increasing yearly costs by up to £1,500.
Diploma, the British-based value-add distributor of specialised technical products and services, surged 14.16% after providing an optimistic outlook that highlighted its resilient growth trajectory. The stellar gain, which reflects the market’s renewed appreciation for its diversified model across controls, seals, and life sciences, underscores the underlying strength still present within UK industrial support stalwarts. This upward momentum further validates the appeal of adaptable supply chain operators, as investors capitalise on the firm’s proven ability to navigate challenging macroeconomic conditions and maintain a competitive edge.
BP, the British multinational oil and gas company, gained 4.07% as escalating geopolitical tensions in the Middle East drove a sharp rally in global energy markets. The solid rebound, which highlights the firm's strategic positioning amid fears of prolonged supply disruptions, was fuelled by warnings that crude prices could soar past $180 a barrel if the Iran conflict persists. This positive assessment from institutional investors signals confidence in the energy giant's reliable cash generation and its ability to capitalise on the volatile commodity landscape.
Endeavour Mining, the multinational gold producer with extensive operations across West Africa, fell 11.53% following a brutal broader sell-off across precious metals. The sharp decline reflects growing investor apprehension as gold suffered its worst week since 2011, plunging 9.6% alongside shifting global monetary expectations. The move highlights the lingering vulnerability within the UK basic resources sector, even as broader London markets demonstrated relative resilience in certain pockets. This downward momentum reflected institutional caution over the firm's near-term revenue generation targets in a suddenly weakening pricing environment.
Market Commentary prepared by Walker Crips Investment Management Limited.
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No news or research content is a recommendation to deal. It is important to remember that the value of investments and the income from them can go down as well as up, so you could get back less than you invest. If you have any doubts about the suitability of any investment for your circumstances, you should contact your financial advisor.
The value of investments can fall as well as rise. Investors may get back less than invested. Past performance is not a reliable indicator of future results.
The value of investments can fall as well as rise. Investors may get back less than invested.
