London, May 9, 2026, 09:29 (BST)
The FTSE 100 slipped for the third consecutive week, dropping 0.4% to finish at 10,233.07 on Friday, after a late-session slide. New clashes in the Gulf put fresh pressure on the U.S.-Iran ceasefire, and local election setbacks for Prime Minister Keir Starmer’s Labour Party didn’t help sentiment. The FTSE 250 index, covering mid-cap stocks, edged down 0.2%.
This wasn’t just about London. The selloff landed alongside a flurry of oil moves, political signals, and fresh company warnings. For the week, the FTSE 100 dropped 1.4%. The FTSE 250, though, managed a 1.7% gain; AIM climbed 2.0%. A market split: global risk on one side, home-focused stock picking on the other.
AJ Bell’s investment director Russ Mould said fresh clashes in the Strait of Hormuz have “extinguished some of the hope” for a near-term U.S.-Iran agreement. Brent crude for July was last quoted at $101.49 a barrel on Friday, up from $97.76 at Thursday’s London close, data from Alliance News show. Morningstar
The FTSE 100 felt the squeeze from a stronger pound, with many of its heavyweights pulling in most of their revenue overseas—meaning that a jump in sterling cuts into profits once converted back. According to Reuters, the pound climbed on Friday, putting extra strain on UK multinationals. Investors also had to digest early election results featuring sharp Labour setbacks.
Debt markets didn’t flinch much. Sterling gained, and UK government bonds—or gilts—jumped after Starmer pledged to remain in office. Yields on 10-year gilts slipped 7 basis points, hitting 4.875%. That’s the usual inverse play: prices up, yields down. “A bit of a sigh of relief from the gilt market,” Aberdeen’s Matthew Amis said. But Lloyd Harris at Premier Miton flagged that “fireworks are still to come.” Reuters
Political risk remains. Starmer insisted he’s “not going to walk away” after Labour posted steep losses in local English elections and parliamentary contests in Scotland and Wales, while Reform UK picked up over 1,000 council seats in England. According to Reuters, more than 20 Labour lawmakers—some publicly, others behind closed doors—have urged Starmer either to reconsider his future or to lay out a schedule for stepping down. Reuters
More reasons to dump stocks came from the corporate side. British Airways parent IAG dropped 2.8% after it flagged annual profits running below expectations, citing jet fuel costs set to jump by 2 billion euros in 2026 versus 2025 amid the ongoing conflict. The company noted it has hedged 70% of its 2026 fuel needs. CEO Luis Gallego said there are “no issues with fuel availability” in IAG’s core markets. Reuters
IAG’s profit alert lumps it together with Air France-KLM and easyJet, both of which have cited similar fuel cost headwinds, according to Reuters. J.P. Morgan’s Harry Gowers noted the conflict will challenge IAG’s resilience, but he still sees the group’s free cash flow holding up.
Intertek slipped again. Shares in the testing firm fell 2.7% after it turned down EQT’s latest bid—the Swedish PE player lifted its offer to £8.93 billion, but Intertek dismissed it as too low and flagged hefty execution risks. Joe Brent at Panmure Liberum commented that another offer could still materialize, either from EQT or elsewhere. Brent also noted if Intertek opts to break itself up, the price tag might drop to £44 or below.
This week, fresh evidence surfaced that rising energy costs and interest rate jitters are starting to show up in the real economy. Halifax reported that UK house prices dipped 0.1% in April, notching a second consecutive monthly drop. Year-on-year, prices edged up just 0.4%—the weakest gain since December. “Recent global developments have introduced a greater degree of uncertainty,” said Amanda Bryden, head of mortgages at Halifax. Reuters
The downside scenario isn’t the sole possibility here. Should a lasting ceasefire materialize, oil prices might drop, dialing back inflation worries—potentially lifting shares of airlines, housebuilders, and banks. But if fighting spreads, higher fuel prices, rising borrowing costs, and renewed stress on public finances could hit fast, putting London stocks at risk heading into next week’s open.
The UK stock market wraps up the week showing old patterns. The FTSE 100 remains tethered to global headlines, sterling moves, and international profits. But the domestically-focused FTSE 250 finished the week in positive territory. Looking ahead, market direction could hinge less on earnings and more on whether oil prices, government bond yields, and Labour Party news settle down, even briefly.
