UK stocks and other European markets moved lower on Thursday, while the pound also weakened, as uncertainty surrounding the Middle East conflict continued. U.S. President Donald Trump said Iranian negotiators are “begging” for a peace agreement.
Earlier in the week, Iran indicated it was not prepared to enter direct negotiations with the United States.
As of 12:31 GMT, the FTSE 100 index was down 1.4%, while the British pound slipped 0.3% against the U.S. dollar to 1.3328 in the GBP/USD pair. Germany’s DAX fell 1.6% and France’s CAC 40 declined 1.1%.
UK round up
The United Kingdom received the largest downgrade to its economic growth outlook among G20 economies due to the Iran conflict, according to the Organisation for Economic Co-operation and Development on Thursday. In its interim economic outlook, the Paris-based body lowered its 2026 UK growth forecast to 0.7%, down from a previous estimate of 1.2%. The revision reflects the impact of disrupted energy supplies and higher commodity prices linked to the U.S.-Israel war with Iran.
UK inflation is projected to rise to 4% this year from 3.4% in 2025, largely driven by higher energy costs. That rate would represent the second-highest inflation level among G7 countries and remains above the Bank of England’s 2% target. The OECD expects the Bank of England to keep its benchmark interest rate at 3.75% before cutting it by a quarter point in early 2027 as inflation pressures ease. Consumer price inflation is expected to fall to 2.6% next year.
British retailer Next PLC (LSE:NXT) said the U.S.-Israeli conflict with Iran could push up costs and dampen consumer demand, even as the company reported higher annual earnings. The group posted profit before tax of £1.158 billion, an increase of 14.5% from £1.011 billion the previous year, while total sales rose 10.8% year over year to £7 billion. Earnings per share reached 744.2 pence. Shares of Next rose following the results.
FirstGroup PLC (LSE:FGP) issued a pre-close trading update, saying performance at both its First Bus and First Rail divisions was in line with expectations. The transport group also revised its net debt guidance for fiscal 2026 to between £135 million and £145 million, an improvement on the £140 million to £150 million range announced in December after the acquisition of Tootbus.
UBS upgraded shares of Close Brothers Group plc (LSE:CBG) to Buy from Neutral and set a price target of 555 pence. The financial services company’s stock has fallen about 25% since the start of the year, pressured by concerns over potential compensation costs related to motor finance, a slow recovery in its loan portfolio, declining revenue and profits, and higher restructuring expenses.
Shares in Currys PLC (LSE:CURY) declined after the electronics retailer said Chief Executive Alex Baldock intends to step down after eight years in the role to pursue a new position outside the company. The board said it will begin a formal search for a successor, considering both internal and external candidates. Baldock will remain in the position during the transition period.
Leave a Reply