UK stocks steadied on Wednesday after a two-day decline triggered by escalating tensions in the Middle East, while housebuilder shares weakened following mixed updates and leadership changes at Barratt Redrow and Vistry Group.
Heavyweight banking stocks, which had fallen earlier in the week amid economic concerns linked to the conflict, led the market recovery. Shares in HSBC, Standard Chartered and Barclays each rose by around 0.9%.
The FTSE 100 climbed 0.7% by 11:24 GMT, after the escalation in the Middle East over the weekend had pushed the index nearly 4% below its record high reached on Friday. The mid-cap FTSE 250 also gained 0.7%.
Despite continued military actions by Israeli and U.S. forces against Iran — which prompted retaliatory strikes across the Gulf region — investors drew reassurance from a pledge by Donald Trump to provide political risk insurance and financial guarantees for maritime trade in the Gulf. The move is seen as one of the administration’s most aggressive steps to contain surging energy prices as the conflict raises concerns about global inflation.
Meanwhile, fresh economic data showed the UK’s services sector expanded strongly last month, although job cuts and price pressures persisted — factors that could influence the upcoming interest rate decision by the Bank of England. Investors currently see roughly a one-in-three chance that the central bank will cut borrowing costs at its March 19 meeting.
Among individual stocks, Metro Bank gained 1.7% after forecasting that a key profitability metric could more than double within six months and nearly triple over the next 18 months.
In the housing sector, Barratt Redrow slipped 1.2% after announcing that Dean Banks, currently chief executive of Ventia, would become its new CEO, with long-standing leader David Thomas set to retire after more than a decade in the role.
Shares in smaller rival Vistry plunged nearly 20%, making it the worst performer on the FTSE 250, after the company warned that profit margins would decline in 2026 and said its chief executive and executive chair Greg Fitzgerald plans to step down.
