The FTSE 100 has suffered a drop of more than 1 per cent on Monday, as stock markets around the world react to strikes on Iran by the US and the ensuing crisis across the Middle East.

While the prices of oil and gold have both gone up, stock markets are heading in the opposite direction as investors weigh the uncertainty and risk around businesses of different types.

In London’s main index, British Airlines owner IAG was one of the biggest fallers in morning trading, falling up to 7 per cent before clawing back some ground, though was still down 5 per cent approaching noon GMT.

BA is among the airlines who have cancelled flights to Tel Aviv and Bahrain, while higher fuel costs may also impact on…