FTSE 100 slides as Brent hits $100 and inflation worries rise

FTSE 100 slipped on Wednesday, dragged down by a fresh surge in oil prices that saw Brent crude climb above $100 a barrel. The rally came after Saudi Arabia’s news agency reported that Houthi‑linked attacks on energy facilities in the Red Sea had wounded several people, tightening supplies through the Strait of Hormuz.

Why the market reacted

Higher energy costs feed directly into inflation calculations, and the move has reignited concerns that price pressures could linger longer than expected. Andrew Bailey, governor of the Bank of England, told MPs that risks to inflation remain "on the upside" and warned that energy prices "could be higher still" in the months ahead.

Market commentary and broader impact

Dan Coatsworth, head of markets at AJ Bell, cautioned that the latest jump could spook investors if it signals a longer‑term trend. "History suggests investors should be alert rather than alarmed when oil trades above $90 per barrel. The impact on markets depends not only on the oil price itself, but also on why it is rising and how long it remains elevated," he said.

The food sector is already feeling the strain. The Food and Drink Federation warned that food inflation could hit 4 % later this year and exceed 6 % by next summer as higher supply‑chain and energy costs filter through.

Analysts will be watching upcoming UK growth figures for clues on whether the economy can absorb these pressures without prompting further monetary tightening.

For more on the governor’s comments, see Bailey flags inflation upside as Iran conflict pushes energy prices higher.