Oil climbs to $111 and FTSE volatile as Trump’s latest deadline looms – MARKETS LIVE

The Iran war weighed on growth in the services industry last month, as firms reported a drop in sales and higher costs.

The S&P Global UK Services PMI survey showed a reading of 50.5 in March, down from 53.9 in February, its lowest score since April 2025.

Any reading above 50.0 means the sector is growing, while any reading below signals it is contracting.

Around 40 per cent of those surveyed reported an increase in their input costs last month, driven by higher fuel and transportation costs.

Tim Moore, Economics Director at S&P Global Market Intelligence, said: ‘UK service providers experienced a marked slowdown in output growth in March as the war in the Middle East encouraged greater risk aversion among clients and postponed investment decisions.

‘Cutbacks to business and consumer spending meant that the rate of business activity expansion was the weakest seen since April 2025.’

While expectations for business activity remained positive, optimism dropped from January’s 15-month high.

Moore added: ‘Service providers widely commented on fragile domestic economic conditions and concerns about the impact of rising inflation and higher borrowing costs on client demand over the year ahead.’

The boss of JP Morgan has warned that private credit losses could be higher than expected as funds are hit with a wave of redemption requests.

Private credit has come under the spotlight in recent weeks, as investors pull their cash from funds because of AI concerns and rising defaults. Some firms have halted withdrawals entirely.

In his annual letter to shareholders, Jamie Dimon said that private credit did not prevent

However, he said: ‘I do believe that when we have a credit cycle, which will happen one day, losses on all leveraged lending in general will be higher than expected, relative to the environment.

‘This is because credit standards have been modestly weakening pretty much across the board; i.e., more aggressive and positive assumptions about future performance (called add-backs), weaker covenants, more use of PIK (payment-in-kind; not paying interest in cash but accruing it), more aggressive private ratings (particularly in insurance companies) and more arbitrage (not always a great sign).

‘Also, by and large, private credit does not tend to have great transparency or rigorous valuation “marks” of their loans’.

Last week, the Bank of England warned that any increase in interest rates could have a knock-on effect on private credit, where investor sentiment ‘had worsened before the conflict started’.

Well, that didn’t last very long. The FTSE temporarily slipped into the red, down around 10 points. It’s now trading flat, up around 5 points, led by small gains for Scottish Mortgage and Games Workshop.

Miners Endeavour and Fresnillo have slipped this morning as gold trades flat at $4,650.

All is not lost though, says ii’s Richard Hunter. ‘The FTSE100 remains defiantly positive on balance, having added 5.2 per cent in the year to date despite the current market uncertainty.

‘By the same token, this performance could provide a springboard should a resolution to the conflict be reached, leading to the possibility of a return to the spike which the index was enjoying up until the end of February.’

Bill Ackman’s Pershing Square Capital has offered to buy Universal Music Group for around £48billion, after its stock price has ‘languished’ in recent years.

Pershing, which already owns a stake in Universal, said it had submitted the plan to the UMG board.

The deal would see the record label merge with a shell company, set up by Pershing, and list in New York.

Investors would receive €5.05 in cash and 0.77 shares in the new company for every Universal share they own.

The total deal is valued at around €30.40 with a total valuation of around €55billion (£48m).

‘Since UMG’s listing, Sir Lucian Grainge and the company’s management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance,’ said Ackman.

‘However, UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business and importantly, all of them can be addressed with this transaction.’

The FTSE 100 opened 20 points higher, despite Trump’s latest escalation in the war with Iran, but the blue-chip index is already starting to waver and trade flat by 8.10am.

Although it has been a volatile start to the year, the FTSE is up over 5 per cent in the year-to-date.