London pre-open: Stocks to fall again amid Iran conflict; Spring Statement due
By Michele Maatouk
Date: Tuesday 03 Mar 2026
(Sharecast News) - London stocks were set for more losses on Tuesday amid worries about the escalating Iran conflict, with Chancellor Reeves due to deliver her Spring Statement.
The FTSE 100 was called to open around 0.6% lower.
All eyes are expected to remain firmly on developments in the Middle East, after US President Donald Trump said he will do "whatever it takes" in Iran and that the conflict could last a month or longer.
During a Medal of Honor ceremony at the White House, he said: "We're already substantially ahead of our time projections. But whatever the time is, it's OK.
"Right from the beginning, we projected four to five weeks, but we have capability to go far longer than that."
On home shores, Reeves will deliver the Spring Statement just after midday.
Morningstar economist Grant Slade said it's expected to be a "fairly humdrum" budget this year, with no major policy changes expected but potentially some minor tweaks to spending.
"One issue that the chancellor may choose to focus on is youth unemployment," he said. "We expect the broader labour market to continue to soften in 2026 and recover cyclically thereafter. By contrast, high youth unemployment rate is a long-standing structural feature of the UK economy and a complex problem for government to address.
"If the government's implied fiscal headroom improves, the government could increase funding of initiatives such as its 'Youth Guarantee' scheme - a £820 million existing funding package aiming to create 350,000 new training and work experience opportunities for young people."
Investors will also be mulling the latest retail industry research, which showed that shop price inflation eased by more than expected in February, supported by stiff competition on the high street and falling food costs.
According to the latest BRC-NIQ shop price monitor, shop price inflation rose by 1.1% last month, compared to growth of 1.5% in January. Consensus had been for a 1.2% uplift.
Within that, food inflation softened to 3.5% from 3.9%, while non-food prices fell 0.1%, reversing January's 0.3% uptick.
Helen Dickinson, chief executive of the British Retail Consortium, said: "Fierce competition between retailers kept price rises in check, with promotions across health, beauty and fashion.
"Falling global food costs also fed through, pushing food inflation down, with ambient food inflation dropping to its lowest level in four years."
Fresh food inflation increased to 4.3%, down marginally on January's 4.4% increase, but ambient food inflation slowed notably, falling to 2.3% from 3.1% a month previously.
Mike Watkins, head of retailer and business insight at NIQ, added: "Since the start of the year, we have seen some competitive pricing across both food and non-food channels, which is helping to bring down inflation.
"While the inclement weather and weak sentiment is making consumer demand rather unpredictable for retailers, at least shoppers are now seeing some of their cost of living pressures start to ease."
In corporate news, testing and inspection specialist Intertek Group forecast further earnings growth following a jump in annual sales and profits.
Revenues in the year to December end rose 1.1%, or 4.3% on a constant currency basis, at £3.43bn, with like-for-like growth of 3.9%.
Diluted earnings per share surged 10.1% on the same basis, at 253.5p, or by 5.4% at actual rates.
Chief executive Andre Lacroix called it a "record" performance, and forecast further progress in the current year, including single-digit underlying revenue growth and "strong" earnings growth.
Fresnillo reported soaring full-year profit on the back of higher gold and silver prices, but cut its production outlook for 2026. Pre-tax earnings for the 12 months to December 31 rose 179% to $2bn.
Silver production fell 13% to 48.7 million ounces while gold output was down 5% to 600,287 ounces. Fresnillo forecast attributable silver production in a range of 42.0 to 46.5 moz and gold production expected to be in the range of 500 to 550 koz.
Engineering firm Smiths Group said it has agreed to acquire US-based custom heat transfer and cooling solutions designer DRC Heat Transfer for £164m.
Smiths said that DRC will be integrated into its Flex-Tek unit's industrial heat business, enabling it to serve "a wider customer group" in fast-growing end markets with DRC products and solutions.
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