March 31 (Reuters) - British stocks edged higher on Tuesday but logged their worst monthly showing since 2020 as the Middle East conflict drove a surge in oil prices, fuelling worries about inflation and slowing economic growth.
The blue-chip index FTSE 100 rose 0.5% but snapped an eight-month winning streak. The mid-cap FTSE 250 climbed 1.2% on the day, but ended a three-month run of gains.
* U.S. Defense Secretary Pete Hegseth said on Tuesday thenext few days in the war against Iran would be decisive andwarned Tehran that the conflict would intensify if it did notmake a deal. * Precious metals miners rose 4.2% and provided the biggestboost to the index as gold prices climbed, with investorsflocking to the safe haven amid inflation fears and expectationsof a hawkish monetary policy response. [GOL/] * Official data from the ONS confirmed that Britain'seconomy barely expanded at the end of 2025, adding to thechallenge for the government to keep growth on track this yearwith the Iran war likely to push up inflation and hit demand. * A BRC survey showed shop price inflation rose in March,putting the Bank of England in focus as it monitors food pricesand inflation expectations. * Investors are betting on two, or possibly three,quarter-point rate hikes by the Bank of England before the endof this year, a sharp reversal from rate cuts seen by tradersbefore the conflict. * Raspberry Pi soared 47% after the single-board computermaker posted better-than-expected rise in annual adjusted coreearnings. * Unilever dropped 7.2% to its worst day since 2008 afterthe consumer goods firm said it was in advanced talks to combineits food business with spice maker McCormick in a potential dealthat would deliver $15.7 billion in cash and give shareholdersmajority control of the merged entity.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Tasim Zahid and Aurora Ellis)
