UK equities moved lower on Friday, with the FTSE 100 retreating as geopolitical tensions intensified following Donald Trump’s decision to maintain a naval blockade on Iranian ports. Oil prices remained near multi-year highs, while diplomatic efforts between Washington and Tehran showed little sign of progress.
As of 07:24 GMT, the FTSE 100 was down 0.36% at 10,341.54. Major European markets, including those in Germany and France, were closed for the May Day public holiday.
Oil Tensions Persist as Strait of Hormuz Outlook Uncertain
Trump reaffirmed his commitment to the blockade, amid concerns that the Strait of Hormuz could remain closed for an extended period.
“Their economy is crashing, the blockade is incredible,” he told reporters at the White House. “Their economy is a disaster. So we’ll see how long they hold out.”
He also suggested energy prices could fall sharply once hostilities ease. “The gas will go down,” Trump said. “As soon as the war is over, it’ll drop like a rock.”
According to Axios, Trump received briefings from senior military officials, including Admiral Brad Cooper and General Dan Caine, on potential contingency strike plans aimed at breaking the diplomatic deadlock.
Escalating Rhetoric from Iran
Iranian leadership signalled a firm stance, with supreme leader Mojtaba Khamenei vowing to maintain nuclear and missile capabilities. President Masoud Pezeshkian described the blockade as “intolerable.”
Foreign ministry spokesman Esmaeil Baghaei cautioned that expectations for rapid diplomatic progress were “not very realistic,” while a senior Revolutionary Guards figure warned of “long and painful strikes” against U.S. positions if tensions escalate further.
Tariff Move on UK Whisky Adds Diplomatic Twist
In a separate development, Trump announced the removal of tariffs on UK whisky following a state visit by King Charles III.
“The King and Queen got me to do something nobody else was able to do,” he wrote on Truth Social.
UK Market Round-Up
NatWest Group (LSE:NWG) reported a 12% rise in first-quarter profit to £2 billion, beating expectations and upgrading its full-year income outlook toward the upper end of its £17.2–£17.6 billion range.
Bank of Ireland (LSE:BIRG) reaffirmed its full-year guidance after net loans increased at an annualised 5% to €83.6 billion, while its non-performing exposure ratio improved to 2%.
Pearson (LSE:PSON) posted a 4% rise in underlying first-quarter sales, supported by strong demand for virtual learning, and said it remains on track to meet full-year targets.
Data from BDO showed UK discretionary retail sales on a like-for-like basis fell 1.6% in April, marking the weakest performance in a decade outside the pandemic, as higher fuel costs and subdued consumer confidence weighed on spending.
Meanwhile, Nationwide Building Society reported that UK house prices rose 0.4% in April and were 3% higher year-on-year, although surveyors highlighted softer demand and the broadest monthly decline in prices since January 2024 during March.
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