London’s FTSE 100 started Friday on a positive note, buoyed by a temporary easing in geopolitical tensions after U.S. President Donald Trump postponed a potential military strike on Iran. The uplift came despite disappointing economic data, with U.K. retail sales showing a steep decline for May.
By 07:13 GMT, the FTSE 100 index had climbed 0.4%, while the pound edged up 0.1% to trade above $1.34. Across the continent, Germany’s DAX gained 0.8%, and France’s CAC 40 advanced 0.6%.
Geopolitical Tensions Ease Slightly
According to the White House, President Trump will take up to two weeks to decide on whether to authorize a military response to recent escalations involving Iran. White House Press Secretary Karoline Leavitt said Trump’s decision is pending further developments, particularly around the prospect of renewed diplomatic talks.
UK Retail Sales Post Steep Decline
Retail spending in the U.K. took a hit in May, dropping by 2.7% month-on-month, according to data released by the Office for National Statistics. This drop followed a 1.3% increase in April and came in below analysts’ expectations. The decline was largely attributed to a slowdown in grocery purchases.
Government Borrowing Overshoots Forecasts
Public sector borrowing reached £17.69 billion in May—surpassing economists’ forecast of £17.1 billion. However, year-to-date borrowing remains £2.9 billion below estimates set by the Office for Budget Responsibility (OBR). The monthly budget deficit came in at £12.8 billion, just under the OBR’s £13.0 billion projection.
Berkeley Group Shares Sink on Weaker Results
Shares in Berkeley Group Holdings PLC (LSE:BKG) plunged more than 8% after the homebuilder reported a 5% fall in pre-tax profit to £528.9 million for fiscal year 2025. Forward sales also dropped significantly, down to £1.4 billion from £1.7 billion.
Despite achieving modest revenue growth to £2.49 billion and an increase in both operating and gross margins, the company’s results spooked investors. Operating profit stood at £500 million, with an operating margin of 20.1% and a gross margin of 26.6%. The company maintained its profit outlook through fiscal year 2027.
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