Business news live: Oil prices surge at highest rate in years amid Israel-Iran escalations while FTSE 100 falls – UK Times

Those oil price rises combined with other domestic events like Rachel Reeves’ spending review means rising UK taxes are inevitable and interest rates could even reverse direction, according to Gervais Williams, from investment manager Premier Miton.

European gas prices also went up at the fastest pace in a month after Israel’s attacks on Iran.

Speaking on BBC Radio 4’s Today programme, he said: “We’ve seen the oil price moving up and that is going to add to inflationary pressures unfortunately.

“It is likely that interest rates cuts will be less, or possibly even interest rate rises to come.

“I think there will be quite a lot of economic uncertainty and I think that will lead to a government shortfall, unfortunately, versus their spending review recently.

“I think that will lead to potentially, unfortunately, to additional UK tax rises later this year.”

As oil and gold prices climb amid Israel-Iran tensions, it has emerged that the US president’s thoughts were dismissed by the nation who launched last night’s attack.

President Donald Trump warned Israeli Prime Minister Benjamin Netanyahu against attacking Iran during a phone call on Monday, saying negotiations with Tehran over its nuclear program should be allowed to run their course before military options were considered, according to a report.

Iran has since retaliated by launching more than 200 drones at Israel.

Read more on that report here:

Next week the Bank of England’s MPC meets on Thursday to give its latest vote on the interest rate.

After being cut to 4.25 per cent, there were plenty who thought that would be that until autumn – but a softening labour market with higher unemployment, slowing wage growth and fewer vacancies gave pause for thought.

Inflation was higher in April than expected and that data for May will come in on Wednesday, just before the MPC decision.

But Barclays analysts expect the MPC will opt to hold interest rates this time around, predicting a 6-3 split in votes, against another 25bp cut.

They maintain expectation for quarterly cuts in August, November and February – taking the interest rate to 3.5 per cent by early 2026 if that’s the case.

There are only about a dozen FTSE 100 firms showing positive trading so far this morning, chief among them the big oil duo and a handful of other energy and mining companies.

Defence firm BAE is the biggest riser, 2.63 per cent in the green, with BP (1.8pc), Shell (1.3pc) and Endeavour Mining (1.8pc) the only firms above one per cent so far.

At the other end – and there are plenty in the red – British Airways owner IAG and Easyjet are the biggest fallers, both down more than 3.5 per cent.

JD Sports, Schroders and InterContinental Hotels Group are all among those with falls of more than 2 per cent.

Oil isn’t the only commodity to be pushing higher on the news of Israel’s attack on Iran.

Gold futures showed a rise of more than 1.5 per cent earlier, before falling back to just over 1.0 per cent now, as investors once more seek safe havens.

Only yesterday, it was revealed that gold had overtaken the Euro as central banks’ second-highest means of creating reserves.

On our European stock markets, there’s an awful lot of red around early this morning.

The price of crude oil shot up early on this morning, following attacks by Israel on Iran which have escalated tensions and the risk of war.

Brent crude oil jumped to just under $76 a barrel before dropping back somewhat, now at $71.65 to show a 4.7 per cent rise.

Crude oil is still 5 per cent up having also hit $75 earlier.

As is usual, not too many companies are reporting on a Friday.

But of those that are, Lindsell Train Investment Trust reporting their finals will be of interest, given previous outflows and more recent suggestion that investors are returning to active, rather than passive, funds.

Energy firm SSE will also be filing their annual report.

And, if you happen to hold the likes of Unilever, Tritax Big Box REIT or insurance behemoth Admiral Group, you can expect a payment today – they’re all on the list of different dividend payers for Friday. Enjoy.

Good morning and welcome to Friday’s edition of The Independent’s rolling coverage of business and stock markets news.

The FTSE 100 will open today from a record high closing price, set on Thursday at 8884.92p.

Falling stocks in the US in part led to that of late, but the perceived undervaluation of UK plc has been much spoken about over the last couple of years and both investors and other companies alike have been taking advantage, with share-buying and entire company-buying prevalent in 2025.

Let’s see where today takes us.