FTSE 100, Gilts Fall on US-Iran Talks Uncertainty

UK markets declined sharply in March 2026 as FTSE 100 and gilt prices fell amid escalating geopolitical uncertainty over stalled US-Iran nuclear talks. Investors shifted to safer assets, with the pound also weakening against the dollar as diplomatic tensions raised fears of regional instability and potential oil supply disruptions. Analysts cited the lack of progress in negotiations as the primary driver, with traders pricing in higher risk premiums across equities and sovereign debt. The sell-off extended to European markets, reflecting broader concerns about energy security and inflationary pressures if Middle East tensions persist. Market volatility surged as hedge funds adjusted portfolios, reducing exposure to UK assets ahead of potential economic fallout from prolonged geopolitical strife.