Market Meltdown: FTSE Hits Multi-Month Lows Amidst Middle East Turmoil

The FTSE 100 and FTSE 250 closed at their lowest in months as the Bank of England decided to keep interest rates unchanged. Conflict in the Middle East intensified market fears, pushing the FTSE 100 down 2.4% to its lowest in two months.

The Bank of England warned of potential inflation risks due to the war in the Middle East, despite maintaining borrowing costs. Policymakers are concerned about battling rising inflation while interest rates remain low, a scenario seen as unsustainable by industry leaders.

Globally, cautious moves were mirrored by the European Central Bank, with rates held steady, echoing a strategy similar to the U.S. Federal Reserve. The energy sector remained a bright spot, posting gains due to heightened oil prices following assaults on Middle Eastern energy sites.