Britain’s FTSE 100 index experienced a notable rise of 1.63% during the last trading week. This surge was fueled by increased investor confidence regarding a potential interim peace agreement between the United States and Iran.
US-Iran Deal Hopes Boost Market
Reports from senior officials indicate that a deal to reopen the Strait of Hormuz may be finalized next week. This agreement could emerge on the sidelines of the upcoming Group of Seven summit in Switzerland, as noted by Bloomberg News.
However, the memorandum of understanding still awaits approval from Iran’s Supreme Leader, Mojtaba Khamenei. The anticipation surrounding this deal has led to a significant drop in oil prices, which fell by more than 2% on Friday.
Impact on Corporate Sector
Major oil companies reflected this volatility. BP (BP.L) decreased by 1.98%, while Shell (SHEL.L) saw a decline of 1.69%, marking them as the largest losers on the blue-chip index.
In other corporate news, Flutter Entertainment (FLTR.L) announced plans to delist its ordinary shares from the London Stock Exchange on August 3. Despite this decision, the company will retain its listing in New York and saw a minor decline of 3.33% in London.
UK Economic Performance
Turning to economic indicators, the UK’s monthly gross domestic product (GDP) recorded a slight contraction of 0.1% in April 2026. This drop was anticipated following a 0.3% increase in the previous month. The downturn marks the first contraction since August 2025.
- Contraction driven by a decline in the services sector.
- Growth observed in construction activities.
- Production levels remained stagnant.
Yael Selfin, vice chair and chief economist at KPMG UK, remarked that while the economy saw a 0.7% growth in the three months leading to April, the contraction is a concerning indicator for future economic growth. Analysts predict a slowdown in UK GDP growth during the second quarter.
Upcoming Economic Data
The coming week will present a range of crucial economic data for the UK. Key releases will include:
- Inflation rates
- Labor market data
- Bank of England’s interest rate decision
- Retail sales figures
- Public sector net borrowing statistics
These upcoming reports will be vital for understanding the trajectory of the UK economy amidst the recent fluctuations.
