FTSE 100 Opens Higher as Pound Strengthens; UK Housing Prices Decline in June

British equities started Tuesday on a positive note, with the FTSE 100 index gaining 0.2%. The British pound also extended its upward momentum, surpassing the $1.37 mark against the US dollar. Meanwhile, major economic data revealed a notable drop in UK house prices for June.

At 07:23 GMT, the FTSE 100 showed modest gains, while Germany’s DAX index slid nearly 1%, and France’s CAC 40 dipped 0.2%.

Sainsbury’s Posts Nearly 5% Sales Growth in Q1

J Sainsbury plc (LSE:SBRY)reported a 4.9% rise in retail sales, excluding fuel, for the first quarter of 2025/26. Over the 16 weeks ending June 21, like-for-like sales (excluding fuel) grew by 4.7%. Grocery sales climbed 5%, and sales in general merchandise and clothing increased by 4.2%. Argos, a Sainsbury’s subsidiary, also saw a 4.4% boost in sales.

The company reaffirmed its full-year outlook, aiming for approximately £1 billion in underlying retail operating profit and over £500 million in retail free cash flow, noting that profits would be weighted more heavily in the latter half of the year.

UK House Prices Experience Sharpest Monthly Fall in Over Two Years

Mortgage lender Nationwide reported a 0.8% decrease in UK house prices in June, marking the steepest monthly drop in over two years. This decline surpassed economists’ predictions of a 0.2% increase and coincided with the expiration of a property transaction discount.

Retail Prices in UK Increase for the First Time in Nearly a Year

Shop prices across the UK rose 0.4% year-on-year in June, according to the British Retail Consortium, reversing a decline of 0.1% seen in May. This uptick was mainly driven by a 3.7% rise in food prices, the strongest annual increase since March 2024.

Aviva’s Acquisition of Direct Line Cleared by Regulators

In corporate news, UK competition authorities approved Aviva’s (LSE:AV.) £3.7 billion takeover of Direct Line (LSE:DLGD), which will establish the largest motor insurer in Britain. The Competition and Markets Authority confirmed it would not pursue further investigation into the deal.