FTSE 100 Live: Stocks drop amid US-Iran war mixed messaging; House prices up

Good morning and welcome back to the City AM liveblog.

Markets are scrambling for some messaging this morning as tensions around the Iran war drag on.

Donald Trump faced a deadline for today whether to formally end the war in Iran or make the case to the US Congress for extending it.

But an official for the Trump administration has defended that the “hostilities” have been “terminated”.

A thinly hanging ceasefire has stopped the exchange of fire between the US and Iran in the last few weeks, but that hasn’t stop the energy shock spreading further as both countries attempt to control traffic through the Strait of Hormuz.

Brent crude – the international benchmark for oil – hit $123 a barrel yesterday, the highest since the war broke out despite the suspension of hostilities. Though levels have managed to take a breather from those highs, oil prices do remain elevated comfortably over the $111 mark.

Yesterday the Bank of England gave a major warning that the inflationary impact of the war in Iran could send inflation soaring to above six per cent and force interest rates back up.

But it comes amidst mixed messaging on the next direction of the conflict. Reports from Axios have suggested the US were reviewing plans for a “short and powerful” wave of strikes on Iranian infrastructure. This would involve a potential operate to take control of parts of the Strait of Hormuz in a bid to restore shipping as well as a possible special forces mission to seize Iran’s enriched uranium stockpile.

We’ll be bringing you the latest market reaction and more.

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