Brent crude oil prices surged past $97 a barrel on Monday after reports that Iran has halted peace talks with the United States, escalating fears of a wider Middle East conflict. According to the IRGC-affiliated Tasnim news agency, Iran's negotiating team is pulling out of message exchanges with the US through mediators until Israel ends its operations in Lebanon and Gaza.
The price of Brent crude rose to $97.58 a barrel, up from $92 at the end of last week, as hopes of a breakthrough in US-Iran relations evaporated. Analysts warn that oil could hit $100 a barrel again soon if the crisis deepens, putting pressure on global equity markets and fuelling inflation fears.
In the UK, house prices fell for the first time this year in May, dropping 0.6% month-on-month, according to Nationwide. The decline reflects rising mortgage rates and weaker homebuyer demand, exacerbated by the ongoing conflict. Housebuilder shares fell sharply, with Persimmon down 4.2% and Barratt Redrow off 3.2%.
The dollar strengthened as investors sought safe havens, pushing the pound down half a cent to $1.341 and the euro to $1.16. Government bond yields also rose, with UK 10-year yields climbing to 4.88% from 4.81% on Friday, as the oil price jump stoked inflation concerns.
