The FTSE 100 fell 0.60% on Tuesday as investors assessed higher oil prices, UK labour-market data and developments in the Middle East.
Elsewhere in Europe, Germany’s DAX declined 0.36% and France’s CAC 40 fell 0.64%. Sterling was down 0.21% against the US dollar at $1.3472.
UK unemployment remained at 4.9% in the three months to July, below the 5% forecast. However, HMRC-based data from the Office for National Statistics showed the number of payrolled employees fell by 101,000 year on year in July, with retail and hospitality recording the largest declines.
Vacancies decreased to 702,000, their lowest level outside the pandemic period in more than a decade, while annual total pay growth slowed to 3.9% from 4.2%.
Liz McKeown, ONS director of economic statistics, said: “The labour market remains broadly stable… however, payrolled employee numbers continue to edge down.”
Oil Prices Rise Above $107
Brent crude rose 1.67% to $107.42 per barrel, while WTI increased 1.7% to $103.09 amid continued disruption to Saudi Arabia’s East-West pipeline and uncertainty over Middle Eastern energy supplies.
ING’s Warren Patterson said Brent had reached an intraday high of close to $110 on Monday and that prices were “likely to remain well supported” until there was greater clarity over the extent of the pipeline damage, which was reportedly expected to keep it offline for several weeks.
Separately, Kpler data cited by Reuters showed vessel transits through the Strait of Hormuz fell to four on Monday from ten previously. Iran’s Islamic Revolutionary Guard Corps also claimed that it had downed a US MQ-1 drone near the strait.
Pakistan and the International Atomic Energy Agency discussed the regional situation, with Pakistan’s foreign ministry saying both sides continued to view the stalled June 17 Iran-US memorandum as the preferred route for reducing tensions.
ExxonMobil executive Andrew Barry said at the Gastech 2026 conference that he expected disruption to Middle Eastern LNG supplies to be short-term. Shell separately estimated that approximately 36 million tonnes of LNG supply from the region had been lost this year.
Gold Falls Ahead of Fed Decision
Gold prices moved lower, with futures declining 0.52% to $4,328.87 and spot gold falling 0.23% to $4,288.93.
ING said gold could face pressure ahead of Wednesday’s Federal Reserve decision as investors assess the potential inflationary effects of higher oil prices.
AI Development Debate Continues
Investors were also monitoring a debate over the development and oversight of advanced artificial intelligence systems.
Anthropic Chief Executive Dario Amodei called for additional safeguards, including independent third-party assessments, and warned about potential risks associated with increasingly capable AI models.
OpenAI Chief Executive Sam Altman and Elon Musk also expressed support for a more measured approach, while US President Donald Trump opposed slowing AI development, arguing that doing so could affect US competitiveness with China.
UK Company Updates
Wickes Group (LSE:WIX) reported a 1.1% increase in first-half adjusted pre-tax profit to £27.6 million, with revenue growth offsetting higher costs. The retailer said it remains on track for approximately 10% growth in adjusted pre-tax profit in 2026.
Trustpilot (LSE:TRST) reported a 23% increase in first-half revenue to $151.4 million, while adjusted EBITDA rose 46% to $26.3 million. The company maintained its full-year guidance for high-teens revenue growth.
Kier Group (LSE:KIE) reported a 7.5% increase in full-year revenue to £4.39 billion and a 6.7% rise in adjusted operating profit to £169.8 million. Its order book stood at £11.9 billion entering fiscal 2027.
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