UK equities moved higher on Friday after stronger-than-expected retail sales figures boosted investor confidence, helping offset ongoing concerns surrounding the escalating conflict between the United States and Iran.
The FTSE 100 gained 0.32% by 03:27 ET (07:27 GMT). Elsewhere in Europe, Germany’s DAX rose 0.88%, while France’s CAC 40 added 0.23%. Sterling also strengthened, with GBP/USD climbing 0.20% to 1.3341.
Middle East tensions and tariffs remain in focus
Geopolitical risks continued to dominate headlines after U.S. Central Command confirmed it had carried out a 13th consecutive night of military strikes against Iranian targets, including command facilities, drone storage locations and coastal surveillance sites.
Iranian state broadcaster IRIB reported explosions across several provinces and said two people were injured near Bandar Abbas. Iranian Foreign Minister Abbas Araghchi accused “compromised individuals” in Washington of pursuing “mindless aggression” that would increase the cost of any future agreement.
Political divisions also emerged in Washington. The U.S. House of Representatives voted 214-208 to limit President Donald Trump’s authority to continue military action without congressional approval, although a similar proposal failed in the Senate by a vote of 47-49.
Meanwhile, Axios reported that Trump is considering a larger military operation than February’s “Operation Epic Fury,” quoting the president as saying, “I am considering a massive attack. Bigger than ever before.” Secretary of State Marco Rubio added that Iran would continue to pay “a very heavy price.”
Trade policy also remained in the spotlight after a new round of U.S. tariffs on imports from 60 trading partners came into force. The duties, ranging from 10% to 12.5%, affect countries including China, India and members of the European Union. U.S. Trade Representative Jamieson Greer said the measures are aimed at nations that do not prohibit imports linked to forced labour.
UK retail sales surprise to the upside
Domestic economic data provided support for UK markets after the Office for National Statistics reported that retail sales volumes increased by 1.0% in June, comfortably beating expectations for a 0.3% decline.
The stronger reading was attributed to increased spending on seasonal clothing, air conditioning products and purchases linked to the World Cup. On an annual basis, retail sales rose 4.2%, significantly ahead of forecasts for 2.3%.
Recent data also showed UK inflation easing during June as fuel and food prices moderated, while labour market indicators suggested employment conditions were stabilising.
Oil retreats while gold remains steady
Energy markets weakened despite the geopolitical backdrop.
Brent crude fell 1.92% to $98.76 per barrel, while U.S. West Texas Intermediate crude declined 1.83% to $90.47. Gold prices were little changed, with futures edging up 0.04% to $4,051.87 per ounce and spot gold slipping 0.01% to $4,049.27.
UK corporate news
Reckitt Benckiser (LSE:RKT) agreed to sell its Russian hygiene business to Arnest Management LLC, expecting to record an estimated post-tax loss of approximately £175 million as it completes its exit from the market.
Hyperoptic announced that its fibre broadband network has now reached two million homes and business premises, with the company shifting its focus from network expansion towards growing its subscriber base following strong revenue growth.
discoverIE (LSE:DSCV) reported a robust start to its financial year, with organic orders increasing 31% and sales rising 6% during the first quarter. The company said adjusted full-year earnings are now expected to exceed the board’s previous expectations.
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