Oil jumps and stocks fall as Iran stops talking to US

Oil prices jumped and UK stocks fell sharply after reports that Iran will pause peace talks with the US in protest at Israel’s strikes in Lebanon.

Brent crude, the international benchmark, has jumped by more than 5 per cent to around $96 a barrel over concerns a breakdown in talks will lead the Strait of Hormuz remaining closed.

A fifth of the world’s oil and gas exports usually pass through the waterway. The FTSE 100 and FTSE 250 in London both dropped 0.8 per cent.

Iran has pulled out of talks with the US in protest for Israel’s bombing of Lebanon, according to Tasnim news agency.

Stocks in Europe and on Wall Street also fell while bond markets also suffered a sell-off.

The yield on 10-year gilts, a proxy for what the UK Treasury pays to borrow money in financial markets, leapt from 4.81 per cent to 4.88 per cent.

The pound slumped by 0.2 per cent against the dollar to $1.343 as investors turned to the US currency, which is considered a safe haven in times of turmoil.

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