UK equities moved lower on Tuesday as escalating conflict in the Middle East drove oil prices higher and weighed on investor sentiment across European markets.
The FTSE 100 declined 0.21% by 07:20 GMT, while Germany’s DAX lost 0.36% and France’s CAC 40 slipped 0.62%. Sterling edged 0.03% higher against the US dollar to $1.3352.
Market sentiment weakened after the United States launched a third consecutive night of military strikes on Iran. According to US Central Command, the attacks targeted missile and drone facilities, including sites near the ports of Bandar Abbas and Bushehr.
The latest strikes followed Iranian attacks on Bahrain and Jordan, while the United Arab Emirates reported that Iranian missiles struck two oil tankers in the Strait of Hormuz, leaving one crew member dead and eight others injured.
US President Donald Trump said the United States would reinstate a naval blockade on Iranian ports from Tuesday and proposed imposing a 20% charge on cargo passing through the Strait of Hormuz. Iran’s foreign minister rejected the proposal as “too much,” while the International Maritime Organization stated there was “no legal basis” for such a toll.
The renewed hostilities come after President Trump formally notified Congress in a letter dated 10 July that military action against Iran had resumed on 7 July following the collapse of an April ceasefire, according to CBS News.
Away from geopolitics, UK retail sales growth slowed sharply in June, according to data released by the British Retail Consortium and KPMG. Total retail sales increased 1.9% year-on-year, down from 3.7% in May and below the 3.1% growth recorded in June 2025. In-store non-food sales declined 1.1%, while online non-food sales rose 5.1% as consumers shifted spending online during the hot weather.
Oil prices continued to climb, with Brent crude rising 2.94% to $85.75 a barrel and West Texas Intermediate gaining 2.83% to $80.36. Gold also advanced as investors sought safe-haven assets, with gold futures adding 0.68% to $4,032.72 an ounce and spot gold rising 0.66% to $4,027.42.
UK Company Round-Up
Robert Walters (LSE:RWA) reported a 3.9% decline in first-half net fee income, while second-quarter net fees were down 4.5%.
Ashmore (LSE:ASHM) exceeded expectations for net inflows as strong investor demand for emerging market assets supported client inflows.
Watches of Switzerland (LSE:WOSG) said strong demand in the United States continued into the new financial year, while trading conditions in the UK showed signs of improvement.
Debenhams (LSE:DEBS) reported that positive trading momentum extended through June and July, with its marketplace model continuing to support growth in gross merchandise value and margins.
Spire Healthcare (LSE:SPI) announced the appointment of Debbie White as chair, replacing Ian Cheshire, as takeover discussions with Toscafund continue.
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