More than £150 billion has been wiped off the value of Britain’s largest listed companies in the worst week for the London stock market in nearly a year, as war in the Middle East rattled global investors. The leading share index fell 5.7 per cent since Monday, with airline group International Airlines Group among the hardest hit as flight cancellations and travel disruption mounted.

Oil prices surged above 92 dollars a barrel for the first time since April 2024, marking a weekly jump of 27 per cent, while government borrowing costs climbed sharply. The yield on Britain’s ten-year government bonds rose to 4.73 per cent, increasing more steeply than in any other European country, amid fears that higher energy prices could fuel inflation and strain the already weak economy.

Investors have sharply reduced expectations of interest rate cuts this year, and some analysts warned that the crisis could push Britain into recession. Qatar’s energy minister cautioned that oil prices could rise as high as 150 dollars a barrel, risking severe damage to the global economy, as concerns grow over prolonged disruption to Gulf energy supplies.

Market turmoil extended beyond Britain, with major stock markets in Germany, France and the United States also falling. Fresh signs of weakness in the American labour market added to investor anxiety, compounding fears that surging energy prices could hit the world economy at a particularly vulnerable moment.