UK and US stock markets rose but Asian indexes tumbled on Wednesday as oil and gas prices remained volatile over fears the US-Israel war with Iran may drag on.

The FTSE 100 index of the largest firms listed in London as well the big US and European indexes all rose on Wednesday following two days of sliding share prices, while several Asian indexes plummeted for a third day.

Oil and gas prices dipped on Wednesday but were still much higher than when the conflict started, after shipping traffic was virtually halted from travelling through a vital waterway near Iran.

Experts have warned that if oil and gas prices remain elevated it could make goods and services more expensive.
David Miles, committee member at the Office for Budget Responsibility, the government’s independent forecaster, said the rate of inflation will increase in the UK if oil and gas prices stay high for a sustained period of time.

However, he said it was important to note the increases in both were “nowhere near as large” as those seen after Russia launched its full-scale invasion of Ukraine four years ago.

“If prices stayed where they were at the moment, probably we’re talking about an impact on the level of prices in the UK maybe of 1% or so,” Miles told the BBC’s Today programme.

Brent crude prices have jumped by 12% since Israel and the US began bombing Iran on Saturday and Tehran responded by attacking neighbouring Arab countries.

On Wednesday, Saudi Arabia’s defence ministry reported an attempted drone attack on its Ras Tanura oil refinery, the second time this week it has been targeted.