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March 26 (Reuters) - London's FTSE indexes dropped more

than 1% on Thursday, as lingering uncertainty about a potential

end to the Middle East conflict weighed on sentiment.

U.S. President Donald Trump said Iran was desperate to reach

a deal to end nearly four weeks of fighting, contradicting

Iran's foreign minister, who said Tehran was reviewing a U.S.

proposal but had no plans to enter talks aimed at winding down

the conflict.

The blue-chip FTSE 100 index fell 1.1% by 1013 GMT,

snapping a two-day winning streak, while the midcap FTSE 250

fell 1.2%.

* Most FTSE 350 sub-indexes traded in the red, except the

energy index, which gained 0.6% as oil prices

clawed back losses from the previous session on worries that

prolonged fighting in the Middle East could further disrupt

energy flows.

* Precious metal miners fell 4.4% as gold

prices weakened amid uncertainty surrounding the conflict.

* Britain's economic growth prospects this year received the

sharpest downgrade of any major economy in the OECD's interim

forecast update following the U.S.-Israeli war on Iran, while

inflation is set to rise faster too.

* Markets have priced in two or three quarter-point hikes

from the Bank of England this year, a sharp reversal from

earlier this year when investors were expecting rate cuts.

* Next rose 5.1% to the top of the benchmark after

CEO Simon Wolfson said that the clothing retailer has not seen a

noticeable drop off in UK sales since the U.S.-Israeli war on

Iran started at the end of February.

* Currys ( DSITF ) fell 8.4% after the electrical retailer

said CEO Alex Baldock will step down, ending a tenure that

delivered a turnaround in profit and margins for the company.

* 3i Group ( TGOPF ) fell 7.6% after the private equity firm

said that its discount retailer Action expects like-for-like

sales growth between 4% and 5% in 2026, broadly similar to the

4.9% growth it recorded in 2025.