Stocks to dip as oil up; UK growth slashed

Good morning and welcome back to the City AM liveblog.

Oil prices are holding firm tipping over the $110 mark, bringing the cost of a barrel closer to the highs of $118 it peaked at earlier in the Iran war.

Brent crude – the international benchmark for oil – advanced another one per cent on Wednesday morning and nudged past the $111 mark.

This also came after the United Arab Emirates announced it would quit Opec – the oil cartel for nations producing the commodity – in a major blow weakening the group.

This morning, National Institute of Economic and Social Research (Niesr) has estimated the UK economy will suffer a hit to growth of at least 0.5 percentage points this year due to the conflict in the Middle East.

The country’s oldest economics think tank revised down its growth forecasts for the UK economy to 0.9 per cent this year, compared to a previous forecast of 1.4 per cent. The UK economy will then barely grow in 2027, with GDP inching up by just one per cent.  

Economists also said that with inflation set to race past the four per cent mark by early next year following the prolonged energy shock. As a result, they expect the Bank of England will opt to hike interest rates as soon as this July as part of an effort to suppress prices pressures.

We’ll be bringing you the latest continued fallout from the Middle East war and top corporate updates for this morning.

Here’s a few of our top stories from the morning