LONDON, May 30, 2026, 10:34 BST
UK stocks booked a second straight monthly gain in May, but June could be tricky with UK data, Bank of England rate bets and uncertainty around the U.S.-Iran ceasefire still in play. The London Stock Exchange was closed for Spring Bank Holiday Monday, so this week’s trading was already short before Saturday’s usual shutdown.
That’s important now as gains lately have come from relief more than earnings. Falling oil prices cooled some inflation worries, and mid-cap UK stocks bounced after weeks of concern over UK growth, politics and borrowing costs.
FTSE 100 slips as FTSE 250 gains for the week
The FTSE 100 closed at 10,409.28 on Friday, down 0.16% for the session, sitting about 0.5% under where it was on May 22. The FTSE 250, which tracks mid-sized UK businesses, finished at 23,425.77, up 0.43% for the day and 1.1% higher over the holiday-shortened week.
FTSE 100 up 0.3% in May, FTSE 250 adds 4.3%; Ocado lifts midcaps as Asda picks grocer for upgrade Reuters said the FTSE 100 was up around 0.3% for the month, with the FTSE 250 tacking on 4.3%. Ocado got a boost on Friday with news Asda will use the group to update its e-commerce setup. Retailers slipped after Deutsche Bank cut ratings on some names, citing lower consumer confidence and spending.
Oil was mixed after Reuters said the U.S. and Iran reached a memorandum of understanding for a 60-day ceasefire extension, still needing approval from U.S. President Donald Trump. That news weighed on crude prices and took away some support from London-listed energy stocks that had seen more backing earlier in the conflict.
Bank of England Governor Andrew Bailey said Friday the central bank can tolerate inflation running above its 2% target for now, pointing to uncertainty from the Iran war and sluggish growth. But he said, “that tolerance would weaken,” if higher prices started to show up in wages and across the economy. Reuters
Markets keep betting on tighter policy. Money-market futures point to 32 basis points in rate hikes this year, Reuters said. That’s just over a quarter-point move. “The UK economy isn’t in great shape,” Danske Bank senior FX strategist Kirstine Kundby-Nielsen said. Reuters
Ocado’s rally stood out in a week focused on the macro picture. Asda executive chairman Allan Leighton said the new deal “will strengthen our online offer.” Ocado CEO Tim Steiner told Reuters he wanted it to be “the start of a long journey together.” JPMorgan analyst Marcus Diebel estimated the agreement might lift Ocado’s annual core earnings by 20 million pounds from 2027, based on a profit metric that leaves out a range of financing and accounting items. Reuters
Market surveys dominate the week. S&P Global’s calendar has UK manufacturing PMI on Monday, services and composite PMI on Wednesday, construction PMI Thursday, and the Halifax house price index Friday. PMI, short for Purchasing Managers’ Index, is built from business surveys. Scores above 50 signal growth, under 50 contraction.
The setup looks fragile. If the ceasefire talks break down, oil could jump and stoke inflation worries, pushing up bets on more BoE rate hikes. Soft PMI numbers would also make it tough for the FTSE 250 to keep leading.
UK stocks have a little breathing space for now. It’s limited. Attention is shifting from where the market finished on Friday to whether June numbers point to a UK economy that can take on higher energy prices without the Bank of England having to step in.
