The FTSE 100 edged lower on Monday but recovered from steeper losses earlier in the session after Donald Trump ordered a pause on military strikes against Iranian power plants, easing fears of further escalation in the Middle East.
The blue-chip index had fallen as much as 2.4% before trimming losses to close down 0.2%, hovering near a three-month low.
Energy giants BP and Shell dropped 2.2% and 4.2% respectively, tracking a sharp decline in crude oil prices following Trump’s remarks, which came ahead of a key deadline that had heightened concerns about the ongoing four-week conflict.
In the bond market, UK 10-year gilt yields briefly climbed to 5.118% — their highest level since July 2008 — before easing back to around 5.00%. Investors also pared back expectations for interest rate hikes by the Bank of England, now pricing in roughly three quarter-point increases this year, down from four earlier in the session.
Among individual stocks, Goodwin plunged sharply, nearly halving in value after the firm said it was considering cutting dividend payouts due to order delays in the Middle East linked to the Iran conflict.
Meanwhile, UK Prime Minister Keir Starmer convened an emergency meeting to address the economic fallout from the crisis, joined by Finance Minister Rachel Reeves and Bank of England Governor Andrew Bailey.
Starmer said the UK must prepare for the possibility of a prolonged conflict, although he added that he had no “meaningful concerns” about the country’s energy supply.
Energy stocks were the worst-performing sector on the day, retreating from record highs reached the previous week as oil prices fell sharply.
