- FTSE 100 down 108 points to 10,399
- Bank of England holds rates at 3.75%
- Oil drops after Trump and Iran sign ceasefire
- US Fed signalled possible rate hikes ahead
- UK unemployment remains at 4.9%
- Tesco sales growth slows but outlook backed
5.30pm: Stocks retreat
It was a losing day for London stocks, with the FTSE 100 down 108 points at 10,399, after the Bank of England held rates steady, as expected.
“Whereas European and US stock indices extended their rallies amid chip producer and AI driven gains, the FTSE 100 followed some of its Asian peers lower,” IG chief technical analyst Axel Rudolph said.
“Falling energy costs after the US and Iran signed an initial agreement late on Wednesday pushed basic materials, energy and healthcare shares down and weighed on the UK blue chip index."
4.18pm: Painful day for heavyweights
It's a painful day for many London blue-chips, with some sizeable declines for many of the index's largest names.
The selling is across more than just two or three sectors.
Miners including Rio Tinto, Glencore, Anglo American and Antofagasta are down between 2% and 3%, while energy majors Shell and BP have shed more than 2% as oil and gas prices retreat.
Defensive healthcare names AstraZeneca and GSK have also fallen around 2.5%, while names in the 'AI worries' bucket like London Stock Exchange Group and RELX are down more than 6% and 3.5% respectively, leaving few places for investors to hide.
That said, there are around 40 stocks in the green, which shows how the falls have been concentrated among the index heavyweights.
Informa is top riser, up 3% after its reassuring trading update.
Then there's tech, leisure and retail getting a boost from falling oil prices and the rebounding Nasdaq, with Polar Capital Tech Trust, JD Sports, IAG, Next and Melrose.
Industrials are up too, with IMI, Halma joining Intertek after it finally accepted a bid from EQT.
3.35pm: Gas prices
I got an email from my energy provider saying it was time to renew my fixed deal, arguing that the Ofgem price cap it rising next month and I would get in ahead of that.
However, energy prices are tumbling and the October cap is likely to be back down again.
As well as the fall in oil prices, UK wholesale gas prices have fallen to their lowest level since before the Israel and the US started bombing Iran, dropping to 95p per therm this morning, and settling around 96-97p.
This compares to highs above 150p and a recent plateau above 120p (prices in 2022 topped 200p, 300p and momentarily 600p).
Prices need to return to below 80p to be where they were last winter.
Azad Zangana at Oxford Economics says while details of the new US-Iran ceasefire deal are scant and there’s a high chance of obstacles on the road to peace, "the agreement is a step towards a permanent deal, and so reduces the downside risks to our forecast".
"We anticipate an initial surge in traffic as ships that have been stuck are able to exit through the Strait. Flows are then expected to slow until confidence builds that the ceasefire is durable. We expect the recovery in shipping to be gradual as logistics are adjusted and oil and gas production restarts."
In a separate Alpine Macro note earlier this week, energy specialist colleague Kelly Xu predicted that the recent surge in LNG prices may prove temporary.
With a US-Iran agreement expected to reopen the Strait of Hormuz and restore disrupted Qatari supply, a wave of new global export capacity, weaker demand in Asia and Europe, and growing renewable energy use could leave the market oversupplied, creating significant downside risk for gas prices beyond the winter of 2026-27.
"Structural demand headwinds are likely to persist and could be reinforced by the Iran conflict as energy security concerns accelerate diversification toward renewables.
"As a result, demand-side rebalancing is likely to deepen the post-conflict market surplus and amplify downside risks to gas prices."
And she said: "More broadly, the Iran war is likely to reinforce the shift toward renewables. Energy security concerns will accelerate diversification, while wind and solar retain a widening economic advantage after more than a decade of cost declines."
"By contrast, natural gas remains exposed to geopolitical disruptions and recurring price volatility, strengthening structural demand headwinds across major importing markets."
2.49pm: Wall Street opens higher, but not SpaceX
US stocks opened have bounced back in opening trades, cutting some of their losses from yesterday.
The Nasdaq and S&P 500 have gained 0.8%, with the Dow Jones up 0.5%.
The strongest gains are in semiconductors and tech hardware, with Intel and Western Digital surging more than 11%, followed by Seagate, with ON Semiconductor, Micron, Monolithic Power Systems, KLA, Lam Research and Applied Materials all up between 5% and 10%, with investors buying the dip after the previous session's sharp declines.
Not all technology names participated, with SpaceX remaining under pressure for the second day, down 4.9% to $182.46, still well up from its $135 IPO price.
Back in London, the FTSE's slump has deepened again.
1.58pm: Persimmon triple whammy
It's been a triple whammy on Persimmon shares today.
Ex-dividend, rates and a Bank of America price target cut.
The analysts kept their 'buy' rating on the stock but now forecast a decline of around 100 basis point in the housebulder's underlying operating margin in 2027, reversing an earlier expectation of a modest improvement, before margins resume growth in 2028.
1.21pm; Wall Street rebound incoming
US futures are pointing to a fairly strong tech rebound, after last night's sell-off following the Federal Reserve's latest meeting, with investors taking comfort from signs of a de-escalation in the Middle East.
Nasdaq 100 futures are up 1.3%, while the S&P 500 and Dow Jones are up 0.6% and 0.2%.
12.54pm: Meeting minutes suggest BoE will not hike unless inflation lingers
Thoughts on the BoE decision are flooding in from the City cognoscenti.
Someone who's had a close read of the statement and meeting minutes is Rob Wood at Pantheon Macroeconomics, who notes that the MPC’s guidance is little changed despite the signing of the Iran ceasefire extension.
"Unchanged guidance may have disappointed some probability priced into markets that more rate setters than Huw Pill and Megan Greene would signal a potential vote to hike rates at the next meeting in July."
He says the minutes are "consistent with Bank Rate on hold for an extended period", with potential MPC members who might have been expected to think about hiking, like Claire Lombardelli, "seem content to hold rates and wait for any evidence of second round effects rather than acting pre-emptively".
Having said that, Wood flags that the minutes show that the Committee is "attentive to the risk that [oil] prices could remain elevated for a longer period" and so as with last month "stands ready to act as necessary".
He sees the key dovish addition to guidance being a slightly stronger statement of the case for tolerating an inflation overshoot for longer "if higher inflation were to reflect mainly direct energy effects".
Wood says: "Rate setters will certainly remain cautious until the oil starts flowing again" and highlights that governor Bailey "has a strong preference to hold".
12.27pm: Bailey sees econ situation as unpredictable
In the statement, quotes are given from members of the committee.
BoE governor Andrew Bailey's leads off with the "marked fall in energy prices in recent days," reflecting progress from US and Iran towards a deal.
But Bailey still stresses that "the situation remains unpredictable, and there is clearly a risk that energy prices remain elevated for an extended duration".
On the positive side, recent ONS inflation prints "give greater confidence that gradual underlying disinflation has continued", backed up by softening Labour market data and signs of demand weakness.
"Our remit recognises that attempting to bring inflation back to the target too quickly may cause undesirable volatility in output.
"Given the context at present of softness in the real economy and uncertainty around the scale and duration of the shock to energy prices, tolerating temporarily above-target inflation as part of a return to target is an appropriate way to approach the trade-off, providing inflation expectations remain contained."
Bailey says he is "content at the present time with holding", as the 3.75% bank rate lingers amid "risks to inflation and interest rates are on the upside, as reflected in the upward slope in the sterling yield curve, which appears to be accounted for more by risk premia than expected rates".
He finishes that he "would respond promptly to any signals that an extended period of elevated energy prices could be leading to stronger possible second-round effects".
12.20pm: Balanced view from BoE
The BoE statement from the MPC meeting says policymakers balanced signs of easing inflation against lingering uncertainty over the economic impact of the Iran war.
The 7-2 vote saw chief economist Huw Pill and external member Megan Greene back a quarter-point increase to 4%.
The MPC noted inflation had fallen to 2.8%, as seen in yesterday's data, and noted that labour market conditions continued to loosen, although it warned that higher energy prices could still feed through into wages and broader inflation if they persist.
Officials also highlighted that borrowing costs for households and businesses have already risen sharply since the outbreak of the conflict, helping to tighten financial conditions without further action from the MPC.
While recent progress towards a US-Iran peace deal has pushed energy prices lower, policymakers stressed the uncertainty of the economic outlook.
Members of the MPC said they were ready to act if evidence emerged that higher energy costs were becoming embedded in domestic price and wage-setting, but for now judged that holding rates was the appropriate course.
12.05pm: BoE holds
The Bank of England did not change the base rate from 3.75%, as expected.
There were two members of the monetary policy committee calling for a rate hike, with the 7-2 vote split expected, compared to 8-1 last time.
11.56pm: FTSE drop deepens
Ahead of the BoE decision, the FTSE 100 is down well over 100 points now, while on the European mainland the moves are much different.
In Frankfurt and Paris, the DAX and CAC 40 are both just in positive territory.
The London index is being dragged lower by weakness across its heavyweight mining and oil sectors, while rate sensitive stocks are all under pressure.
Among mining stocks, the biggest fallers are precious metals diggers Fresnillo and Endeavour Mining, followed by Anglo American, Antofagasta, Glencore and Rio Tinto, all retreating 3-2.3%.
AI-sensitive stocks are down too: LSEG, RELX, Sage and Rightmove, while Tesco's results have dragged on its shares, while Marks & Spencer and Kingfisher have lost ground too.
11.01am: All aboard the FirstGroup buyback
FirstGroup shares have driven higher as the bus and rail operator opened the door to a new £100 million share buyback after results beat expectations.
Adjusted operating profit fell slightly to £219 million but ahead of the £214 million expected by analysts.
The full-year dividend was hiked to 7.2p from 6.5p, alongside the buyback.
Chief executive Graham Sutherland said the performance came despite "significant headwinds" and reinforced the group's track record of delivering shareholder returns.
10.39am: Intertek agrees deal
Intertek shares are up 1.5% to 5,805p after it agreed to a takeover by a consortium led by private equity firm EQT and Abu Dhabi's sovereign wealth funds, in one of the largest UK public-to-private deals of the year.
The shares are still below the final offer price, which will see shareholders receive £60 in cash for each share and retain the final dividend of 107.7p, taking the total value of the offer to £61.077 per share
The testing, inspection and certification company rejected bids of £51.50, £54.00 and £58.00 per share, before the board said a month ago that it said it would be minded to recommend a deal at this level.
The offer values Intertek's equity at approximately £9.5 billion, including the dividend, and implies an enterprise value of about £10.9 billion including debt.
André Lacroix, Intertek's chief executive, says the offer "represents an attractive opportunity for Intertek shareholders by delivering cash certainty today".
10.29am: Hormuz scepticism
Prediction market traders remain doubtful that shipping traffic through the Strait of Hormuz will return to normal by the end of June.
Polymarket currently assigns only a 20% probability to a full normalisation of traffic by 30 June.
The scepticism is persisting as two commercial vessels so far, a laden liquefied natural gas carrier and an empty products tanker, successfully began transiting the strait under arrangements approved by Tehran.
Iran's President Ahmad Masoud Pezeshkian has posted the full MOU text on Twitter. [image or embed] — George Pearkes (@peark.es) June 18, 2026 at 11:53 AM
9.37am: Iran agreement details
Details on the interim agreement signed by the US and Iran show how it sets out a framework for negotiating a permanent end to the conflict.
The 14-point memorandum includes the full reopening of the Strait of Hormuz to maritime traffic for an initial 60-day period, the lifting of US sanctions on Iran, the unfreezing of Iranian assets and the creation of a $300 billion fund to support post-war reconstruction.
Iran also agreed not to pursue nuclear weapons and to allow the down-blending of its stockpile of enriched uranium. Both Donald Trump and Iranian president Masoud Pezeshkian signed the agreement, which officials said came into force on Wednesday.
However, obviously there is plenty of uncertainty still.
Trump gave his usual warning the US would resume military action if Tehran breached the deal, saying Washington would "bomb the hell out of them" if Iran failed to comply.
And importantly, Iran indicated it intends to impose transit charges on ships using the Strait of Hormuz after the initial toll-free period.
9.03am: FTSE down, pound down
After just over an hour, the FTSE 100 is down 66 points.
Only one of the top 10 largest companies is not in red (Rolls-Royce) and only two of the top 30 (Compass is the other), with the bigger falls among the group being mining and oil companies.
Shell and BP are both down over 1%, with Rio Tinto and Glencore both over 1.5% lower. Energy related utilities National Grid and Centrica are also down over 1%.
Energy prices falling, while the bond market and the dollar both reprice upwards, are the main pressures.
Another factor that the UK corner of bond market is no doubt keeping an eye on, today is the Makerfield by-election, where expected leadership challenger Andy Burnham is odds-on to win.
On oil, market analyst Neil Wilson at Saxo says the US and Iran moving to reopen the Strait of Hormuz has seen Brent crude fall below its 200-day moving average – "a clear move here could see crude back to pre-war levels".
He says last night's hawkish Fed is "more important for stocks", are interest rate hikes are back on.
"This morning it’s a mixed bag across European equities with London lower and Frankfurt and Paris higher. Asia was mixed but the Kospi and Nikkei both hit record highs.
"So, relief over the war has been held in check by a reassessment of where rates are headed...ultimately though I don’t think it matters much whether rates are+/-50bps in terms of the longer-term AI/semis/tech story that continues to drive this market.
"US futures are higher this morning. This week has seen a regime change and the market is adjusting."
Today, the Bank of England's monetary policy committee is expected to leave rates on hold.
"We are seeing emergence of a stark divergence in monetary policy between the Fed and BoE," says Wilson, which has sent the GBP/USD rate to its lowest since the start of April.
8.43am: UK unemployment unchanged, private sec pay growth eases
In all the Fed and Iran drama, I neglected to notice that the Office for National Statistics had also published its labour market data.
The figures are unlikely to alter expectations ahead of today's BoE decision, with the unemployment rate unmoved at 4.9% and little other sign of a sharp slowdown,
Private sector regular pay growth slowed to 2.9% in April from 3.1%, though total average pay climbed to 4.4% from 4.1%.
Payroll employment rose by 2,000 in May after a heavily revised decline in April, while vacancies and redundancies showed only modest signs of weakening.
Rob Wood at Pantheon Macroeconomics says: "The labour market was easing only gradually, if at all, three months into the US-Iran war, giving the MPC little reason to pivot back to rate cutting even if oil prices eventually return to their previous levels.
"The MPC certainly won’t hike later today, while a July increase is off the table. But caution will have to be the watchword."
He sees a good chance of further upward revisions to private pay, with the overall picture being a labour market "that is easing only gradually".
8.24am: Ex-divs and rate expectations
Some more details on the ex-dividend stocks that are leading the fallers: these are Persimmon, 3i Group, Compass Group, Land Securities and British Land.
Ex-dividend means whoever buys the shares today is no longer entitled to their latest shareholder payout. Shares typically fall by roughly the value of the dividend when they begin trading ex-dividend.
The combined index adjustment from the five stocks is 5.17 points, with 3i Group accounting for the largest impact at 1.99 points, followed by Compass Group at 1.37 points. Land Securities contributed 0.70 points, Persimmon 0.53 points and British Land 0.46 points.
Persimmon, Land Sec and British Land are also likely to be getting hit by the rise in rate expectations stemming from the Fed.
FTSE 250 ex-divs include Fidelity China, GB Group, AEP Plantations, Tate & Lyle and BlackRock World Mining.
8.15am: FTSE drops at open
The FTSE 100 dropped 78 points to 10,430.5 in opening trades on Thursday.
Despite the US and Iran signing a ceasefire deal last night, most of the London index is in red, with less than 20 companies' shares moving higher.
Ex-dividend companies are leading the falls, with housebuilder Persimmon down 6%, property developer Land Sec down 4.3%, followed by British Land.
Tesco is down 3% despite reiterating full-year guidance.
7.58am: Fed shock but Iran deal signed
News overnight that US and Iranian leaders signed an MoU to end the war has helped lower oil prices, but a portentous debut of the US Federal Reserve's new chair seems still likely to weigh on markets today.
Kevin Warsh’s first appearance as Fed chair yesterday was "a momentous one", says Deutsche Bank economist Peter Sidorov.
He says Warsh’s "inflation-fighting rhetoric" left "a sense that rate hikes are firmly under consideration", which has led investors to fully price in a rate hike by October, which hit risk assets including stocks.
However, futures erased most of this decline overnight following news of the US-Iran deal, with Nasdaq and S&P 500 futures up 1.25% and 0.8% now.
Warsh's debut as chair, where he repeatedly noted the importance of the Fed delivering on its "price stability" mandate, the meeting "left an undeniably more hawkish Fed tone", says Sidorov, and led to the market repricing chances of a September hike from 36% to 80%.
However, the US stock sell-off was partially reversed overnight following news shortly after the US close that the Presidents of the US and Iran had electronically signed an interim deal to end hostilities, which had initially been expected on Friday.
According to reports, the 14-point MoU foresees a rapid re-opening of the Strait of Hormuz, with an extendable 60-day period to negotiate a final deal that would cover nuclear issues and broad sanctions relief.
Following the MoU signing, Brent crude is down 2.4% to $77.67 a barrel as I type.
Asian stocks are mixed, with Japan's Nikkei up 1.6% but Chinese stocks down again, with the Hang Seng dropping 2%.
7.39am: Tesco backs outlook despite slower sales
Tesco has reported a slowdown in first-quarter sales growth but backed its previous profit guidance for this year after a solid performance in its core UK business.
Sales for the UK's largest grocery chain, excluding VAT and fuel, rose 1% to £16.8 billion in the 13 weeks to 30 May.
Group like-for-like sales growth came in at 1.0%, down from 3.5% last year, including 5.1% in the first quarter.
FTSE 100 pre-open
London's blue-chip shares are expected to fall on Thursday after Wall Street's reaction to yesterday's Federal Reserve meeting sent bond yields higher ahead of today's Bank of England meeting.
The FTSE 100 has been called 40 points lower on the futures market, a day after battling to a 14.4-point gain at 10,508.61 by the close.
US stocks finished lower overnight after the Fed held rates steady, but pointed to a weaker economic outlook and new chair Kevin Warsh signalled that he would meaningfully scale back the level of forward guidance the central bank gives in future.
The tech-heavy Nasdaq led the losses, falling 1.3%, with the S&P 500 dropping 1.2% and the Dow Jones 1%. The Magnificent Seven tech giants fell nearly 3% and SpaceX also had its first down day, losing almost 5%.
There were two main takeaways from the Fed meeting, says market analyst Kathleen Brooks at XTB: a shift in current economic projections, and Warsh having "essentially disbanded with forward guidance in written form".
The projections showed a reduction in GDP expectations for this year and a dramatically higher forecast for inflation, with the FOMC not expecting it to return to the 2% target rate until 2028.
"The biggest change at today’s meeting was the statement. Its brevity was astounding, and it was less than half the length of other FOMC statements."
The Fed’s hawkish policy announcement on inflation concerns sent the US 2-year yield to the highest levels in almost one-and-a-half years, points out market analyst Ipek Ozkardeskaya at Swissquote.
"The spread between the US 2- and 10-year yields fell to the lowest levels in a year – an inversion is generally read as economic trouble with a possible recession. Activity on Fed funds futures now assesses more than a 70% chance of an October rate hike, and nearly an 85% chance of a December hike.
"Naturally, the thought of a hawkish Fed policy and higher interest rates weighs heavily on risk appetite."
UK rate futures have started to price a higher chance of the Bank of England tightening by end-2026 following jobs data, up from 29 bps on Wednesday.
