European stock markets have risen following strong gains in Asia overnight, while the price of gold has risen.

The FTSE 100 index in London is 1% ahead, a rise of nearly 100 points, at 10,063. Germany’s Dax and Italy’s FTSE MiB both climbed 1.7% while France’s CAC increased 1.5% and Spain’s Ibex is 1.6% ahead.

Spot gold climbed more than 2% to $4,564 an ounce. However, it has lost 13% since the Iran war started on 28 February, having traded at $5,277 an ounce the day before, raising questions over its status as a safe-haven asset.

Oil prices have fallen this morning on hopes of a ceasefire in the Middle East, after Donald Trump sent his 15-point peace plan to Tehran – although Iran launched further missile attacks. Brent crude has dropped 6.3% at $97.96 a barrel.

The UK has offered to host an international security summit to draw up a “viable, collective plan” to reopen the strait of Hormuz as economic fallout from the Iran conflict continues.

Defence chiefs have been discussing how they could unblock the vital shipping lane, through which about 20% of global oil supplies usually pass, amid the Middle East crisis unleashed by the US and Israel.

The Ministry of Defence has already sent military planners to US Central Command to look at options for getting tankers through the strait, which has in effect been closed by Tehran’s threat of retaliatory attacks.

More than 30 countries including the United Arab Emirates, the UK, France, Germany, Canada and Australia have signed a joint statement agreeing to work on “appropriate efforts” to safeguard the waterway.

Food price inflation in the UK has also eased, but the Food and Drink Federation warned this could the “the calm before the storm,” as the conflict in the Middle East threatens to push up food prices again, becaue of higher energy and fertiliser costs.

Food and non-alcoholic drink prices rose at an annual rate of 3.3% last month, down from 3.6% in January.

Confectionery, particularly chocolate, pulled the annual rate lower, as prices fell in February but rose a year ago. This was partially offset by small upward contributions from dairy products and vegetables.

Prices fell in nine categories, with the largest drops for: olive oil (-10.4%), flours (-8.3%) and pizza (-4.9%).

Prices rose the fastest for beef and veal (20.6%), offal (17.0%) and whole milk (13.1%).

Karen Betts, chief executive of the Food and Drink Federation, said:

While food inflation fell slightly in February 2026, I am concerned that this is the calm before the storm. The longer the conflict in the Middle East goes on, the bigger its impact will be on food prices. With food and drink price inflation already running above historical averages, heightened energy, maritime fuel and fertiliser costs will put further pressure on prices.

Food and drink is an essential, bought by every household, every week. While it can take several months for cost rises to filter fully through to shop shelves, the cost of the Iran conflict will be felt by shoppers this year. If government is serious about tackling the rising cost of living, it must provide our industry with at least the same support as other manufacturing sectors. The current energy shock is yet another structural shock our industry will have to absorb, on top of the Ukraine war, the costs of realigning food law with the EU once again, and new regulatory burdens.

The federation’s members have reported that UK haulage companies have implemented an increase on emergency fuel surcharge of up to 20%. And the ocean freight lines have also implemented an emergency bunker surcharge of around $400 per container to cover higher oil cost.s

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Inflation in the UK was unchanged last month, as expected – before the Iran war drove up global energy costs, threatening a renewed price jump.

Official figures showed the consumer prices index (CPI) stayed at an annual rate of 3% in February, the same as in January. Economists had expected it to stay at 3%.

Clothing made the largest upward contribution to the monthly change while motor fuels made the largest, offsetting downward contribution, the Office for National Statistics said.

The outlook for inflation has changed dramatically since the onset of the Middle East conflict, which has sent oil and gas prices soaring after the effective closure of the key transit route of the strait of Hormuz.

This means the interest rate outlook has also shifted, with markets now expecting several rate hikes, rather than cuts, this year.

Charlie Ambler, co-chief investment fficer at wealth management firm Saltus, said:

While we expected February’s inflation data to remain stable around 3%, increasing oil prices are widely expected to push up the headline rate of inflation to near double the 2% target later this year, threatening the Bank’s slow and steady rate cutting cycle and frustrating markets. Should this materialise, markets are unlikely to respond well.

While the Bank of England has signalled a cautious and data dependent approach to monetary policy, resulting in a hold at 3.75% last week, financial markets have already reacted sharply to the changing global outlook. Investors are now pricing in the possibility of multiple interest rate increases this year, with some expectations pointing to as many as four rises before the end of 2026. The gap between market expectations and the Bank’s own guidance highlights just how uncertain the inflation outlook has become.

Oil prices dipped this morning to hover around $100 a barrel, after Donald Trump sent a 15-point peace plan to Iran and voiced optimism about ending nearly a month of war.

Brent crude fell 4.1% to $100.2 a barrel, while New York light crude lost 3.5% to $89.12 a barrel. Both benchmarks rose nearly 5% on Tuesday.

However, Iran’s Revolutionary Guards said it had launched a new wave of attacks against locations in Israel including Tel Aviv and Kiryat Shmona, as well as US bases in Kuwait, Jordan and Bahrain, according to Iranian state media.

Asian stock markets rebounded strongly, with Japan’s Nikkei up 2.87% while South Korea’s Kospi rose 1.6%.

The Agenda

• 8.45am BST: ECB president Christine Lagarde speaks

• 9am BST: Germany Ifo business climate

• 9.30am BST: UK house prices and rents

• 11am BST: US Weekly mortgage applications