Susannah Streeter, chief investment strategist at Wealth Club, said: “The spectre of high interest rates has seen investors finally take fright, and the slide is being exacerbated by renewed Middle East conflict.
“While markets had been surprisingly stoic through the Iran war and a painful energy crunch, sentiment is now more fragile.
“Iran has fired missiles at Israel, sparking fresh worries about the inflationary impact of the war.
“Brent crude has risen sharply, up four per cent, trading above $97 a barrel as supplies in the region stay stranded.
“The prospect of borrowing costs staying higher for longer, if the prices stay elevated, has shattered the optimism which had pushed indices to record highs.
