UK Gas Prices Drop Below Pre-Iran Conflict Levels as Supply Fears Recede

UK wholesale gas prices have retreated below pre-Iran conflict levels, driven by reduced consumption in Asian markets and easing supply concerns. Amidst this decline, Chancellor Rachel Reeves vowed to decouple wholesale electricity prices from gas prices, a move that triggered a sell-off in the energy sector. Shares in SSE PLC and Centrica PLC fell by 5.2% and 4.9% respectively following the policy signals. Utility firms emerged as the biggest laggards on the FTSE 100, despite a broadly positive mood across European equity markets. The government's plan aims to link electricity pricing to lower-cost renewables to provide long-term fiscal relief. Market participants are now weighing the impact of these structural reforms on the future profitability of major British utility providers.