- FTSE 100 down 75 points at 10,524
- Gilts barely flicker as new PM starts work
- Wall Street rebounds (well, sort of)
- Mahmood odds-on to become chancellor
- SEGRO rebuffs third approach
5.30pm: Stocks stumble
London stocks finished Monday’s session lower, with the FTSE 100 down 75 points at 10,524, as investors reacted to policy announcements from new PM Burnham.
“The new prime minister has been in his role for less than 24 hours, and he is said to be considering £24bn of spending increases,” XTB research director Kathleen Brooks said.
“It is still unclear exactly what Burnham’s economy policy will look like, which is leading to significant confusion, hence the selloff in the bond market on Monday.”
4.08pm: Muted money market reaction
The gilt market greeted Andy Burnham's arrival in Downing Street with little more than a shrug.
The yield on the 10-year UK government bond nudged up about 3 basis points to 4.98% after the new prime minister pledged to deliver a "new economic model" for the country.
Burnham also promised a 10-year plan and immediate cost of living support, with the first measures set to be announced as soon as tomorrow.
The muted move suggests investors are, for now, willing to wait for detail before repricing the fiscal outlook.
Equities were lower, but that had more to do with the geopolitical backdrop and the escalating hostilties between the US and Iran, with the Footsie off 80 points.
Elsewhere, Panmure Liberum has downgraded Trustpilot Group PLC (LSE:TRST) to 'hold' from 'buy', arguing the reviews platform's valuation has run too far while the shares remain highly volatile.
The broker lifted its target price to 250p from 235p, below the current share price of 259.8p, saying it struggles to remain constructive at this level.
Trustpilot's rating has expanded to 4.3 times the 2026 enterprise value to sales, against three times when Panmure upgraded the stock.
The downgrade comes despite first-half bookings growth of 18%, around 1 percentage point ahead of the broker's forecast, with revenue 2.1% ahead.
3.10pm: Wall Street in the green
London's blue-chips slipped into the afternoon, with the FTSE 100 down 74 points as escalating US-Iran tensions revived inflation fears and kept a lid on risk appetite.
A ninth straight day of American strikes on Iran, plus reports of tankers being immobilised in the Strait of Hormuz, pushed Brent crude above $90 a barrel for the first time in a month.
Investors were also digesting Andy Burnham's arrival in Downing Street as Britain's new prime minister, with gilt yields edging higher as markets weighed the fiscal implications.
"The Iran war has escalated and driven oil prices back above $90 a barrel," said Russ Mould at AJ Bell, noting that inflation fears are back on the table with major implications for interest-rate expectations.
Wall Street offered some cheer, with tech stocks the standout gainers in London, rising 0.5% ahead of a heavy week of US Big Tech earnings.
The Dow edged up 0.3%, the S&P 500 added 0.5% and the tech-heavy Nasdaq popped almost 0.8%, recovering from a bruising week for semiconductors, with results from Alphabet, Intel, IBM and Tesla in focus as a fresh test of the AI-driven rally.
2.07pm: Where the surprises might lurk
Andy Burnham's arrival in Downing Street has barely registered with markets, but ING thinks that calm may not last.
Confirmation of his candidature for the Makerfield constituency spooked investors two months ago, but his first days as prime minister have drawn little more than a shrug, with the bond market risk premium contained.
The consensus points to a modest Autumn Budget of cheap, eye-catching measures like cheaper bus fares and lower hospitality taxes, comfortably financed within the fiscal rules.
But ING reckons Burnham could still spring surprises, whether on capital spending for social housing, property tax reform, a costly rise in the tax-free allowance, or eventual changes to the fiscal rules themselves.
The bigger wildcard is a snap election, which betting markets price at 15% to 20%.
Why gamble away a 166-seat majority when polls suggest Labour would lose almost half its seats? Yet with Reform leading and new leaders rarely growing more popular, ING suspects the odds are higher than they look.
12.50pm: Footsie pares losses as Burnham takes the keys to Number 10
The FTSE 100 was down 23 points but off its session lows on Monday as Andy Burnham delivered his first speech as Prime Minister outside 10 Downing Street.
London's blue-chip index had opened deeper in the red, weighed by a tenth day of US-Iran hostilities, before clawing back ground as the new premier spoke.
Burnham, the sixth person to walk up Downing Street as a new Prime Minister in a decade, struck a deliberately sober note, saying Britain "faces a moment not for triumphalism but for honesty and reflection" and pledging tangible improvements in people's lives.
Markets will be listening closely for clues on the fiscal direction of travel, given the former Greater Manchester mayor has previously floated £40 billion of borrowing to build council houses, income tax cuts for lower earners and a 50p top rate.
Gilt investors have been twitchy about a Burnham premiership for months on expectations of looser budgets, though he has insisted his "Manchesterism" agenda should reassure the bond market.
Much now hangs on whether Rachel Reeves keeps the Treasury.
Elsewhere, oil eased back from $91 a barrel as Iran signalled diplomatic channels with Washington remain open, taking some heat out of the energy complex.
12.10: Mahmood leads the field
As Andy Burnham prepares to receive the keys to 10 Downing Street, the City's preoccupation is with his new next-door neighbour.
However, the shock would be the appointment of anyone other than Shabana Mahmood, the current Home Secretary.
Polymarket has her as the clear favourite with an 86% chance of succeeding Rachel Reeves in the post.
So, with Sir Keir Starmer now having officially tendered his resignation to the king, Burnham will kiss the hand before addressing the press corps outside Number10 (lecternless, we are led to believe).
During the afternoon, the main cabinet roles will be filled, with the new chancellor presumably receiving the first call.
9.50 am: Oilers up, airlines and housebuilders tumble
BP and Shell led the FTSE 100 risers early on as Brent topped $90 a barrel for the first time in more than a month, with the US military launching a ninth straight day of strikes on Iran and traffic through the Strait of Hormuz slowing to a trickle.
Just a handful of ships transited the waterway on Sunday, and Tehran claims to have hit two of them.
Analysts warned that the longer the strait stays shut, the greater the risk crude has to climb towards $150 a barrel to choke off demand, though that is not his base case.
For the oilers, all of this means fatter margins and, in Shell's case, a gas trading business already feasting on the volatility.
Airline stocks, led by International Consolidated Airlines Group, off 2.2%, led the index lower.
They were joined at the foot of the Footsie by the housebuilders, stalked by the fear of higher costs and higher interest rates.
Thirty-year Treasury yields are back above 5%, and the read-across for UK rates and mortgage costs is doing the sector no favours.
The builders had enjoyed a bounce on talk that incoming Prime Minister Andy Burnham could revive Help to Buy, but rate jitters are trumping policy hopes today.
8.30 am: Gulf conflict unsettles market
Blue chips hit reverse gear, with the FTSE 100 down 66 points as the escalating Gulf conflict keeps traders on edge.
Brent crude topped $90 a barrel for the first time in more than a month, with the US military launching a ninth straight day of strikes against Iran and barely a handful of ships braving the Strait of Hormuz.
That is grim news for inflation watchers, with futures markets now pricing in a 60% chance of a Federal Reserve rate hike as early as September.
The oil majors are unsurprisingly the day's big risers, lapping up crude's climb, while the housebuilders propped up the index as the prospect of dearer borrowing for longer weighs on the sector.
Attention now turns to a bumper week of tech earnings, with Alphabet, Intel and Tesla all reporting, and the European Central Bank's rate decision on Thursday.
The day's big corporate news came from Prologis, which lodged a third bid for warehouse and logistics group SEGRO, worth £13.5 billion, with a £2.7 billion cash kicker.
