The FTSE 100 index has tumbled by 2.5%, closing at 7,115 points, its lowest level since 2018. The decline was triggered by the sharp rise in oil prices, which have surged to a 13-year high due to ongoing supply chain disruptions and geopolitical tensions.
The price of Brent crude oil has surpassed $80 per barrel, fuelling concerns about inflation and recession. Meanwhile, the pound has weakened against the US dollar, reaching a 31-month low of $1.24.
Analysts attribute the market downturn to a combination of factors, including escalating global tensions, rising interest rates, and the ongoing COVID-19 pandemic.
The decline in the FTSE 100 has significant implications for UK investors and pension holders, who may see their portfolios suffer as a result. With the pound weakening, import costs are likely to rise, further eroding consumer confidence and spending power.