Conflict in the Middle East caused market volatility throughout March 2026. Find out what other factors may have affected your investments.

While the ongoing uncertainty may feel unsettling for investors, remember that your strategy reflects your long-term goals and considers periods of volatility.

Oil prices rising and ongoing uncertainty led to stock markets falling

On Saturday, 28 February, the US and Israel began strikes on Iran, which led to markets falling when they opened on Monday 2 March.

The FTSE 100 recorded its biggest loss since November 2025 when it fell 1.2%, with airlines, luxury goods makers, and banks particularly affected. In contrast, defence stocks increased, including the UK’s BAE Systems, which was up 7% at the start of trading.

It was a similar picture in Europe. The main indices in France, Germany, Italy, and Spain were down 2.2% or more. When markets opened in the US, the Dow Jones Industrial Average and the wider S&P 500 both dropped 1%.

As the Middle East is a major oil-exporting region, conflict there led to prices rising. Deutsche Bank stated Brent crude was up 8.4%, though it added it was only the 38th largest oil spike since 1990.

The volatility continued on 3 March, with the FTSE 100 recording the biggest daily loss in 11 months when it fell 2.75%. Germany’s DAX (-3.6%), France’s CAC 40 (-3.5%), and Italy’s FTSE MIB (-3.9%) also suffered losses.

Asia-Pacific markets weren’t immune to the effects of the war in Iran either. Japan’s Nikkei index fell 3.6%, and South Korea’s KOSPI was down 12% on 4 March due to concerns about shipping through the Strait of Hormuz, a key sea passage for trade, particularly for oil.

On 11 March, the International Energy Agency proposed the largest release of oil reserves in history to bring crude prices down. The news led to Asian shares climbing, with the main indices in Japan and South Korea rising by 1.4%.

However, energy fears continued to influence European markets. On 16 March, the FTSE 100 was down by 1.9%, and the index’s 2026 gains were wiped out on 20 March.

Markets briefly rallied on 23 March following news that negotiations would take place between the US and Iran. However, there were conflicting reports that led to confusion. Despite this, US markets improved, with the Dow Jones up 2%, and construction equipment firm Caterpillar leading the way with a 4.4% rise.

UK

The Office for National Statistics said the UK economy stagnated in January 2026. The data suggests the economy was weakening even before the effects of the conflict in the Middle East were felt. Furthermore, inflation in the 12 months to February 2026 was 3%, stubbornly sticking above the Bank of England’s (BoE) 2% target.

The British Chambers of Commerce commented that the UK is stuck in a “low-growth pattern”, after the 2026 GDP forecast was downgraded from 1.2% to 1%. The organisation said the revised estimate reflects weak productivity, subdued investment, and cautious consumer spending.

At the start of March 2026, Chancellor Rachel Reeves delivered the government’s Spring Statement. In it, she said inflation would fall faster than expected, economic growth would pick up in 2027 and 2028, and there was headroom in the budget.

However, the calculations were made before the conflict in the Middle East began, which is expected to affect the economic outlook.

For instance, rising energy prices could influence inflation. Indeed, the Office for Budget Responsibility estimated the Iran war would add 1% to UK inflation this year. In turn, high inflation may lead to the BoE increasing interest rates, which would place pressure on consumers and businesses.

Data from S&P Global’s Purchasing Managers’ Index (PMI) was positive for the manufacturing and service sectors.

In February 2026, the manufacturing PMI continued to grow, recording a reading of 51.7 – a figure above 50 indicates growth – and a rise in business both at home and abroad. The service sector fell slightly compared to the previous month to 53.9, but still shows growth.

In contrast, the construction sector fell to 44.5 in February, which marked 14 consecutive months of contraction.

Europe

Across the eurozone, the annual inflation rate was 1.9% in February 2026, up from 1.7% a month earlier, and very close to the European Central Bank’s (ECB) 2% target.

The ECB opted to hold interest rates in March, but warned that uncertainty could lead to higher inflation and pose risks to economic growth, which might lead to higher interest rates in the coming months.

The European Commission consumer confidence survey highlights this fear among consumers, with the reading falling amid worries that the Iran war could drive up energy costs.

The S&P flash report on output in the eurozone fell to 50.5 in March, down from 51.9 in February. The reading represents a 10-month low, and it is close to the 50 mark, which signals stagnation.

US

As expected, inflation in the 12 months to February 2026 remained stable at 2.4%.

However, data from the Bureau of Labor Statistics was less positive. The US economy lost 92,000 jobs in February, which could be a sign that the market is cooling, and the ongoing conflict might lead to businesses taking a more cautious approach in the coming months.

A consumer sentiment survey carried out by the University of Michigan indicates that the Iran war is already influencing how confident people feel about their financial future. The reading fell from 56.6 in February to 55.5 in March.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Research suggests that many small business owners and self-employed workers aren’t prioritising their retirement and could face uncertainty later in life as a result. However, opening a pension could benefit both you and your business.

According to an article from Which? (1 March 2026), people who have spent most of their working life as self-employed are three times more likely not to have a private pension.

Fluctuating earnings and a reliance on your business could mean you overlook a pension

There are many reasons why small business owners are less likely to pay into a pension.

A key one is that your earnings might fluctuate, which may make it difficult to balance your short- and long-term financial priorities. Indeed, according to Which?, 4 in 10 self-employed workers cite this as their biggest barrier to retirement saving.

Working with a financial planner to create a tailored plan could help you understand how to manage retirement contributions.

Another reason small business owners might overlook a pension is the belief that their business will provide an alternative.

Whether you plan to sell your business or continue working later in life, having an alternative way to create income could be valuable, as it’s impossible to know what’s around the corner. For example, you might struggle to find a buyer who is willing to pay the price you want, or you may decide to retire earlier than expected due to ill health.

Without a pension to fall back on, you could face difficulties if things don’t follow your plan.

Working with a financial planner to create a cashflow model could help you assess your options. A cashflow model can help you visualise how your wealth might change depending on the decisions you make.

For example, you might use it to calculate how much you’d need to sell your business for to provide “enough” in retirement, or how much to contribute to a pension to provide a base income.

The outcomes of a cashflow model cannot be guaranteed. However, it could provide useful insight when you’re making long-term decisions, such as whether to contribute to a pension.

3 practical reasons small business owners could benefit from a pension

While most employed workers are now automatically enrolled into a pension, as a small business owner or self-employed worker, it is your responsibility to open a pension. Here are three practical reasons to do so.

1. A separate pension pot could offer peace of mind

While you may hope to use your business to fund your later years, a separate pension pot could act as a safety net in case something unexpected happens.

Separating some of your finances from those of your business could help keep your retirement on track. However, you should note that you cannot usually access your pension savings until you turn 55 (rising to 57 in 2028). As a result, you might want to consider your pension contributions in a wider context, such as other savings and investments that could help you meet short- and medium-term goals or expenses.

2. A pension is a tax-efficient way to save for your retirement

If you’re saving for retirement, a pension is often a tax-efficient way to do so.

First, your contributions will usually benefit from tax relief, which means some of the tax you’ve paid is added to your pot, providing an immediate boost to your retirement savings and reducing your tax liability.

Tax relief is paid at your rate of Income Tax. Typically, basic-rate tax relief will be added to your pension by your pension provider automatically. If you’re a higher- or additional-rate taxpayer, you can claim your full entitlement through a Self Assessment form.

Second, returns made from investments held in your pension will not be liable for Capital Gains Tax, which may not be the case for investments that aren’t in a tax-efficient wrapper.

3. Pension contributions may be an allowable business expense

Paying into your pension could be tax-efficient from a business perspective. In some cases, contributions are treated as an allowable business expense, which could reduce taxable profit and the business’s overall tax bill.

Contact us to talk about your retirement

If you’d like to create a retirement plan as a small business owner, please get in touch. We could help you assess your options, including opening a pension, and create a plan that’s tailored to your needs and goals.

Please note: This article is for general information only and does not constitute advice. The information is intended only for individuals.

All information is correct at the time of writing and is subject to change in the future.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The Financial Conduct Authority does not regulate cashflow modelling.

As Christopher Nolan’s much-anticipated new film, The Odyssey, is due to hit cinemas in the coming months, we can expect a resurgence in interest in the classical Greek myths.

Telling the story of Odysseus’s journey home after the battle of Troy, the film brings Homer’s epic poem to the big screen. The hero faces a multitude of challenges along the way, clashing with sea monsters, Sirens, the Cyclops, and the god of the sea himself, Poseidon.

Greek myths are enduring, captivating tales which can still hold our attention thousands of years after they were first written. They can teach us plenty about the world and life, too.

Read on to discover seven lasting financial lessons we can learn from Greek myths.

1. Odysseus: Adapt your plan to weather the unexpected

King of Ithaca, Odysseus, embarks on a 10-year journey to return home from Troy to his wife and son. However, the journey is fraught with danger. Along the way, he faces the one-eyed Cyclops, the alluring but murderous Sirens, the many-headed monster Scylla, and the wrath of the gods. He and his men have to demonstrate resilience at every turn, as they face up to each new challenge.

While today’s challenges may be a little less dramatic, the concept remains the same. Creating a plan for your financial journey is an important starting point. However, it’s wise to always expect the unexpected, and having a robust plan that can be adapted to encompass changing circumstances can help you withstand any of the more modern trials life can throw your way.

2. King Midas: Wealth alone won’t bring you happiness

King Midas famously wished that everything he touched would turn to gold. However, when his wish was granted, he found he was unable to smell flowers, taste food, or even hug his beloved daughter without turning everything to gold.

It’s not a difficult jump from his tale to the present day, as the same caution around an excessive focus on wealth accumulation still applies. While it’s a good idea to save and invest for your future, we will always encourage you to consider what makes you happy in life.

Smelling the roses and hugging your family can always continue to be a priority. Your wealth is there to help your wishes come true; it’s not the end solution in itself.

3. Icarus: Overconfidence can be as dangerous as not taking any risk

Escaping imprisonment, Icarus and his father Daedalus fly away using wings made of wax and feathers. Filled with hubris, Icarus flew too close to the sun, the wax melted, and he fell to his death.

When we help you create your financial plan, we’ll always discuss your attitude to risk and plan your investments accordingly. For the most part, a balanced portfolio can offer you long-term returns. Overconfidence, especially early on, can be almost as bad as taking no risk at all, as Icarus found out to his detriment.

4. Ariadne: A safety net is important

The story of Ariadne tells how she fell in love with Theseus and gave him a ball of thread to help him navigate the labyrinth of the Minotaur, so he could always return to his starting point.

This safety net stopped Theseus from getting hopelessly lost and was a simple act which likely saved his life.

In financial terms, your safety net is also important. This could be in terms of protection, such as life insurance or critical illness cover. Or it could be in terms of keeping a small amount of your wealth as cash reserves, saving between three to six months’ worth of basic expenses in an accessible account.

5. Achilles: Understand your weaknesses

The Greek warrior Achilles was dipped in the River Styx as a baby, with his mother holding his heel as she did so. He became invulnerable except for this tiny area, and the Achilles heel is now the common term for a sign of weakness.

Ultimately, Achilles was killed by an arrow which hit his weak point. Understanding more about your own weaknesses can protect your wealth from suffering.

For example, are you prone to taking too much risk, or too little? Do you struggle to stick to a budget? Once you’ve identified your financial vulnerabilities, it can be much easier to overcome them.

6. The Trojan Horse: Be aware of hidden risks and costs

Hiding inside the Trojan Horse, the Greeks managed to enter the city of Troy unnoticed, going on to conquer it.

It’s always a good idea to understand exactly what the implications are of any financial transaction or investment, so you don’t get trapped by hidden issues in the shape of risks or costs.

Always do your due diligence before making any commitment, and if you’re in doubt, please speak to us first.

7. Orpheus and Eurydice: Don’t keep checking your investments

After his beloved wife Eurydice died, Orpheus persuaded Hades, the god of the underworld, to release her. Hades agreed, but on the condition that Orpheus not look back until he and Eurydice were both in the sunlight. Orpheus was unable to resist the temptation to look, and his wife was swallowed by the underworld forever.

While this darkly tragic tale is an extreme example, it can demonstrate the risks of constant checking. By all means, look at how your investment portfolio is faring a few times a year. But if you fall into the trap of checking every day, you could start to panic during times of volatility. Historically, these have righted themselves, and there is nothing to gain from constant over-checking.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

It’s common to be juggling different goals with various time frames, which can be difficult to balance.

Over the next few months, you can read tips on managing short-, medium-, and long-term financial goals, and how a financial plan could help you bring them together on our blog. This month, read on to find out why short-term goals are just as important as your long-term ones, and how you might make the most of your money.

Short-term goals are an important part of your financial plan

Typically, short-term goals are defined as those occurring within the next two years. They might include going on holiday, buying a car, or paying for a wedding.

Alongside saving for retirement or paying off your mortgage, your short-term goals might feel less important. However, they’re just as valuable for your overall wellbeing and play an important role in your financial plan.

When you’re working towards a short-term goal, holding the money in cash is often appropriate. This is because if you invest your money, it could be exposed to short-term market volatility, which could affect your ability to reach your goals.

While the value of your savings in real terms is lower if the interest paid is lower than the rate of inflation, the effect of this over the short term is less severe than if you were saving for a long-term goal.

As well as goals you’re working towards in the next two years, you might also want to include an emergency fund to cover unexpected expenses as part of your cash savings. This fund could provide you with peace of mind and financial security should something happen, such as your roof leaking or an inability to work due to illness.

As you want to be able to access the money quickly in the event of an emergency, a cash account often makes sense.

3 ways to hold your cash that could be more effective than a piggy bank

Even when you’re working towards short-term goals, there may be ways you can make your money work harder. Here are three options you might want to consider when holding cash.

1. Savings account

A savings account is a common place to hold cash for short-term goals.

The money you deposit will earn interest. It’s worth looking at different accounts as the interest offered can vary significantly, and some may offer higher introductory rates or attractive incentives, such as a one-off bonus. Even a small difference in the interest rate could boost your savings.

It could be useful to automate payments to your savings account, so it’s part of your regular budget. Viewing savings as essential may help you stay on track and mean you’re less likely to spend the money on something else.

2. Cash ISA

A Cash ISA is similar to a traditional savings account – your deposited money earns interest. However, ISAs offer a tax-efficient way to save and could be valuable if you might otherwise pay tax on the interest earned.

The Personal Savings Allowance (PSA) is the amount you could earn in interest before tax may be due. The allowance depends on the rate of Income Tax you pay. In 2026/27, the PSA is:

• £1,000 for basic-rate taxpayers
• £500 for higher-rate taxpayers
• £0 for additional-rate taxpayers

You might be surprised by how easy it is to exceed the PSA. For example, if your savings account paid interest of 4.5%, you’d only need to deposit £11,111 before you could start paying tax on the interest if you’re a higher-rate taxpayer.

The good news is that interest earned from money held in a Cash ISA is not liable for Income Tax.

So, if you might pay tax on your savings, a Cash ISA may provide a way to reduce or eliminate the potential bill.

In 2026/27, you can deposit up to £20,000 into ISAs, and you may place the full amount into a Cash ISA if you choose. From 6 April 2027, if you are under the age of 65, your total ISA allowance will remain at £20,000; however, the Cash ISA limit will fall to £12,000.

3. Premium Bonds

Finally, Premium Bonds might be an option for your cash savings.

Premium Bonds are issued by NS&I, so they’re backed and guaranteed by the Treasury. Rather than paying interest on savings, bonds are entered into a monthly prize draw. As of April 2026, each bond has a roughly 23,000-to-1 chance of winning, with prizes ranging from £25 to £1 million.

While the opportunity to win big is exciting, keep in mind that Premium Bonds do not pay interest, so the value of your savings could fall due to the effects of inflation if you don’t win.

The maximum you can hold in Premium Bonds is £50,000.

Transfers from a Premium Bonds account can take several days, so this option might not be suitable as your emergency fund.

Contact us

If you’d like to talk to us about your goals and how you might use your money to reach them, please get in touch.

Next month, read our blog to discover how you might manage your money when you’re working towards medium-term goals.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

How your brain works can affect how you view wealth and different assets. For many, this can mean cash feels like a safer option than alternatives, but it’s not always the right one. Indeed, sometimes choosing to hold cash could mean you miss growth opportunities.

3 reasons why cash might feel like the “safe” option

1. Cash can feel more tangible than alternatives

One of the benefits of cash is that you can withdraw the money and hold it. This makes it feel more tangible as an asset. Even when cash is held in an account, knowing that you can access it and it’s typically simple to manage online might mean it feels more comfortable than assets like bonds or stocks.

2. Cash is accessible when you need it

You can usually access cash when required. This means it can act as a valuable safety net and feel like the safe option as a result.

3. Cash can seem more stable than other assets

While the value of cash assets does change due to inflation, the effect is often gradual. When you compare this to market movements that may affect your investments, this stability might seem attractive.

These factors, as well as others, might lead people to choose cash over alternatives because it’s perceived as safer.

According to an article published by IFA Magazine (7 March 2026), cash is taking on a more prominent role in the portfolios of high-net-worth individuals. Indeed, 38% of this group say they hold more cash than they did three years ago, with cash accounting for around £1 for every £5 of their wealth.

Inflation could mean the value of your cash falls in real terms

The value of cash can feel static. After all, when you place a sum into an account, the figure doesn’t rise and fall as other assets might. However, inflation can erode the value of cash if the interest rate doesn’t keep up.

As the cost of goods and services rises, your cash will gradually buy less as its spending power is reduced. Over the short term you might not notice this, but it can have an impact over the long term.

According to the Bank of England’s inflation calculator, if you deposited £10,000 into a savings account in 2014, it would need to have grown to £13,390 by 2024 to have the same spending power. This is due to an average annual inflation rate of 2.96%.

So, while holding cash might feel safe and be appropriate in some circumstances, you could benefit from examining the alternatives.

When you might consider investing instead of cash

Investing might be an appropriate option when your goal is long term.

Over a long-term time frame, investments have the potential to deliver returns that are above interest rates. As a result, you may consider it if your goal is more than five years away. This is because the ups and downs of market movements typically smooth out over a long period.

However, it’s important to note that investment returns aren’t guaranteed. All investments carry some risk, and assessing what level of risk is appropriate for your circumstances and goals is an essential step when creating an investment strategy.

Contact us

If you’d like to discuss how to manage your wealth, including cash, as part of a wider financial plan, please get in touch.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The current situation in the Middle East has led to market volatility. While it might seem new, similar movements have happened before, and looking at how these events have affected investor behaviour could be useful.

At the end of February 2026, the US and Israel launched strikes on Iran, which have further escalated. The uncertainty caused by the war has affected market confidence, leading to falling prices.

The Middle East is a large exporter of oil, and the war has resulted in prices rising, which is likely to affect businesses and consumers around the world. In addition, the Strait of Hormuz, an important waterway for trade, has been affected by the conflict, which may harm international supply chains.

These external factors may be affecting the value of your investments.

Market volatility refers to changes in the value of assets

In simple terms, market volatility refers to the value of assets changing. When markets are experiencing greater volatility, prices will rise or fall more sharply than usual. Volatility can be affected by many factors, such as geopolitical tensions, economic news, investor sentiment, and interest rates.

While volatility can seem concerning and unusual, it’s a normal part of investing. Indeed, even over the last 20 years, investors have experienced many periods of high volatility, including during the 2008 financial crisis and the Covid-19 pandemic.

If you look at the performance of market indices, you’ll see they are not straight lines. Prices naturally fluctuate, and there will be points where they shift sharply. While performance cannot be guaranteed, markets have historically recovered from dips over a long-term time frame.

In many cases, staying the course, rather than reacting to market movements, is the best course of action. However, high levels of volatility may trigger some investors to act in a way that doesn’t align with their long-term strategy.

Here are two types of investor behaviour to be mindful of during volatility.

1. Panic selling

When you’re worried about losing money, you might feel as though you need to react. So, investors might be tempted to panic sell portions of their portfolio amid market volatility. As mentioned above, markets have recovered from downturns in the past, and by panic selling, investors could turn paper losses into real ones.

There might be times when selling assets and adjusting your strategy is appropriate. However, these decisions shouldn’t be driven by emotions, like panic. Instead, assessing your personal goals and circumstances could help identify where you might make changes.

2. Following the crowd

When things seem uncertain, it can feel comforting to do what other people are doing. This can lead to an investor mentality of following the crowd. It might feel comforting, but it could also lead to inappropriate decisions.

While an investor might make a decision that’s right for them, it could be inappropriate for you because you have very different circumstances or goals.

So, if you feel tempted to alter your investments, it may be worthwhile assessing what’s driving the decision. You might be influenced by the actions of someone you know or by reading news articles that suggest other investors are reacting to market volatility.

We can answer your investment questions

If you have questions about your investment portfolio and how the current situation might affect you, we can help. Please get in touch to speak to one of our team.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.