UK equities moved lower on Thursday ahead of the Bank of England’s interest rate decision, while oil prices surged as tensions in the Middle East intensified. Brent crude climbed to about $114 per barrel, heightening investor concerns about inflation and global economic stability. The latest UK labour data showed unemployment holding steady while wage growth slowed to around 3.9%.
At 08:32 GMT, the benchmark FTSE 100 index was down 1.6%. Meanwhile, the British pound edged slightly higher against the dollar, with GBP/USD rising 0.01% to 1.3258.
Elsewhere in Europe, markets were also under pressure. Germany’s DAX dropped 2.03%, while France’s CAC 40 declined by 1.5%.
Global market developments
Federal Reserve Chair Jerome Powell delivered a relatively hawkish message, indicating that inflation must decline further before policymakers consider cutting interest rates. His remarks dampened expectations for a near-term shift toward monetary easing.
In Asia, the Bank of Japan left its interest rates unchanged overnight, although one policymaker dissented from the decision.
Both the European Central Bank and the Bank of England are widely expected to keep interest rates unchanged later on Thursday. Such decisions would extend the broader pause in policy adjustments among major global central banks after several institutions also held rates steady earlier in the week.
Middle East developments
Geopolitical risks intensified after Israel launched a strike on Iran’s South Pars gas field. Iran responded by targeting energy infrastructure in Qatar and the United Arab Emirates.
Tehran also warned that energy facilities in other Gulf countries could become targets for additional retaliatory actions, raising fears of wider disruption in global energy markets.
UK corporate updates
LSL Property Services (LSE:LSL) reported underlying operating profit of £32.6 million for fiscal 2025, slightly above analysts’ expectations of £32.2 million. The company reiterated its outlook for further profit growth in 2026, reporting a return on capital employed of 35% and net cash of £27.8 million. It also declared a total dividend of 11.4 pence per share and previously announced a £12 million share buyback programme in January.
DFS Furniture plc (LSE:DFS) reaffirmed its full-year profit guidance of £43–50 million, despite noting weaker customer traffic recently due to adverse weather conditions. The retailer reported first-half revenue of £547.7 million, an 8.6% increase year on year, while pre-tax profit rose 82% to £31 million.
Eurocell (LSE:ECEL) posted preliminary 2025 revenue growth of 13%, largely driven by its acquisition of Alunet. Adjusted operating profit rose 6% during the year, though adjusted pre-tax profit declined 5% to £19 million as a result of higher financing costs.
Central Asia Metals (LSE:CAML) reported revenue of $229.9 million for 2025, exceeding the consensus estimate of $224.9 million from analysts. However, the company recorded a net loss after booking a $117.8 million impairment charge at its Sasa mine. Adjusted free cash flow reached $56 million and EBITDA totalled $101.8 million, representing a 44% margin.
Capital Ltd (LSE:CAPD) reported a sharp increase in annual profitability, with net profit after tax jumping 318% to $71 million in 2025. Revenue slipped slightly by 0.6%, while adjusted EBITDA rose 1.1% as the company continued expanding its mining services and investment portfolio.
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