- FTSE 100 up 131 points at 10,716
- Index hits highest since 3 March
- Inflation eases to 2.6% from 2.8%, but core CPI unmoved
- Brent crude oil hits 6-week high
- Wetherspoon's, Greencore, Mulberry, Liontrust post updates
5.35pm: Winning day
The FTSE 100 finished the day on the front foot, adding 131 points at 10,716.97.
“It has been a stellar 48 hours for the FTSE 100, which has found its footing thanks to strength in oil, precious metals and dividend stocks,” IG chief market analyst Chris Beauchamp said.
“A rotation away from tech has resulted in a better day for European markets overall, which continue to defy the strength in oil. The focus now shifts to the US as the first of the hyperscalers, Alphabet, reports earnings, offering some relief from what appears to be a fast-deteriorating situation in the Middle East.”
4.06pm: Hefty gain
With less than an hour to go, London's blue-chip index is on course for a hefty gain of at least 150 points.
Gains are spread across sectors, with miners including Endeavour Mining, Fresnillo and Antofagasta still among the top climbers. Oil majors BP and Shell are up 2.1% and 1.4% as oil prices have been lifted.
Financials are well bid, especially those with a big focus on China: Prudential, Standard Chartered and HSBC advanced more than 2%. Among more domestically focused lenders, Lloyds is up 1.7%, with NatWest and Barclays either side of 1%.
Housebuilders Persimmon and Barratt Redrow have gained after softer-than-expected UK inflation boosted hopes for lower borrowing costs.
Segro extended its rally after Prologis raised its takeover proposal. Some analysts say it's still well short (see 2.23pm update).
This is despite US trade tensions being "back", according to economist Carsten Brzeski at ING.
"While markets have been focusing on the war in the Middle East and the renewed rise in energy prices, the last two weeks have again been very busy on trade and tariffs, even by the standards of last year."
Canada is being hit hardest by President Donald Trump latest proclamations this week, with 50% tariffs on Canadian goods.
"There are also clear efforts to respond to the Supreme Court's February ruling that struck down tariffs," says Brzeski, with a permanent replacement under covering roughly 60 economies in two tiers: 10% tariffs on 14 economies including the EU, UK, Canada and Mexico, and 12.5% on 46 others, including China, Vietnam, India and Japan.
"These tariff rates are probably low enough for most US trading partners not to oppose them," he says, pointing to the European Commission signalling that these duties are unjustified but that it would accept them as long as they stay under the 15% Turnberry cap.
3.38pm: AI not showing any step-change in productivity
Barclays has dribbled some cold water on expectations that artificial intelligence is delivering any sort of meaningful productivity boom (yet?).
The bank's economists say AI adoption is proving "gradual and steady rather than rapid and transformative", with just one in 10 US workers using AI daily despite around 45% saying they have incorporated it into their jobs.
They also found "little compelling evidence" that industries adopting AI more quickly are enjoying stronger productivity growth, arguing recent gains are more likely the result of businesses unwinding post-pandemic labour hoarding rather than a technological step-change.
Barclays added there is currently little reason to expect AI-driven productivity gains to ease inflation or influence monetary policy.
(This was extracted via a much more detailed analysis on FT Alphaville.)
3.12pm: Super Micro with super update
An exception to the selling on the Nasdaq, shares in Super Micro Computer have surged over 23% after the company released preliminary Q4 results showing significantly stronger-than-expected gross margins and a record order backlog, despite revenue tracking near the low end of its guidance.
The AI server maker said last night that revenue is expected to be "near the low end" of its previously issued guidance but gross margins are likely to be 15-17% versus prior guidance of 8.2-8.4%.
The company said total new orders received during the fourth quarter topped $60 billion.
2.51pm: Mixed on Wall Street, as London gains pile up
Wall Street has opened in mixed fashion, with the investor hokey-cokey seeing technology stocks in the red ahead of key earnings from Alphabet and Tesla after the close today.
The Dow Jones is up 170 points, or 0.3%, while the Nasdaq fell 0.4%, with the S&P 500 slipping 0.1%.
Industrial and defensive names led the Dow gains, with Honeywell, Verizon, 3M and Chevron the top risers.
Meanwhile, the Nasdaq's fall resulted from declines in semiconductor and AI-linked stocks, with AppLovin, SanDisk, Workday, Palantir and Lam Research leading falls as investors take profits after the rally yesterday.
In London, the gains are piling up, up 1.5% now, with life insurer Prudential, housebuilder Persimmon, engineer Weir, gold miner Endeavour, landlord Segro and defence contractor Babcok among the top risers.
2.23pm: Prologis bid 'still far away' from Segro value
Prologis earlier raised its proposal to buy Segro from £13.5 billion to £14 billion, saying this would be its "best and final" offer unless there is a competing offer or panel consent.
This increase is "modest", says analyst Bjorn Zietsman at Panmure Liberum, and is "still below the true value in our view".
It also remains below Segro's own components of 905p NAV, plus 103p Industrial & Logistics pipeline and 139p data centre pipeline, which would total 1,147p, even before the "164p cluster premium" is considered.
"The increases in the blended offer have been modest, driven by movement in PLD's own share price and a marginally richer exchange ratio, but hardly by any change in how the DC or I&L pipeline is being valued."
"Nothing in this proposal responds to the pipeline NPV or scarcity value of the assets."
Zietsman says the latest proposal is "still far away from our calculations" and what Segro suggests would be an accurate valuation.
"Whether SEGRO's board requests the extension is now the swing factor for how this plays out into next week."
1.40pm: Drones and electronics drive UK defence deals
Mergers and acquisitions in the UK defence sector hit a record high in the first half of 2026, with private equity investors increasingly outbidding trade buyers as demand for military technology businesses accelerates.
The first six months of the year saw 84 trade deals and 33 financial transactions, according to the analysis by consultancy Heligan Group, with drone developers, maritime electronics firms and businesses with sovereign UK capabilities attracting the strongest interest.
The advisory firm said defence valuations continue to rise as investors position themselves ahead of increased government spending.
“In H1 we’ve seen that acquirers will pay a strategic multiple if an acquisition can help with supply chain resilience and dual use is no longer seen as a buzzword but a primary lens through which MoD procurement is now evaluated," says Heligan partner Matt Croker.
"The defence and national security market is repricing with valuations increasing, but this fundamental change is still early in its cycle. Capital follows capital, and now that the Defence Investment Plan (DIP) has finally been released, a further step-up in M&A and investment activity is a near certainty,” he adds.
12.57pm: UBS calculates UK bonds' politcal premium
Political uncertainty around the changes in Downing Street has added around 20 basis points to UK government borrowing costs since February, according to UBS, which estimates investors are demanding a higher premium to hold gilts amid concerns over fiscal policy.
European and US government bond yields have also risen during this time, due to worries about the inflationary effects of the Iran war, but UK gilts have risen more.
Economist Arend Kapteyn says the premium for gilts above other bonds could unwind if Andy Burnham and his new chancellor John Healey stick to existing fiscal rules at the Autumn Budget.
"We believe Burnham's earlier comments about complying with the current fiscal rules have capped the upside on UK gilts, and if the Autumn Budget complies with the fiscal rules, we estimate gilt yields could rally by at least 20bp.
"If the rules are changed, however, the risk premium could rise materially," Kapteyn says.
12.43pm: Polymarket banned in France
Polymarket said it is "disappointed" after France's national gambling authority (ANJ) ordered internet providers to block access to the prediction market's website.
The ANJ says the crypto-based platform offers illegal gambling and breaches national regulations, citing concerns over consumer protection, gambling addiction and market manipulation.
The move follows similar action in Spain and the Netherlands, while regulators in the US are also stepping up scrutiny of prediction markets including Polymarket and its rival Kalshi.
Financial transactions by French users on Polymarket have been banned since 2024, but the website remained accessible.
The regulator said this amounted to advertising for an illegal game of chance and so has issued the order to French ISPs.
12.02am: FTSE leading European surge
All European markets started in the red this morning, then have marched higher as the morning has gone on.
The FTSE is up 1.2%, making it Europe's best-performing major index, with investors piling into London's as investors shrug off tensions in the Middle East and buy into a mix of cyclical and defensive stocks.
Segro is top of the leaderboard now, after Prologis raised its takeover proposal 9.5%, making what it described as its "best and final" offer, valuing the UK warehouse landlord at around £14 billion.
Prologis also urged Segro's board to seek an extension to Wednesday's takeover deadline to allow more time to negotiate a recommended deal.
Overall, the Footsie index is "in a good spot, as its defensive qualities and high number of miners and oil companies benefit from rising geopolitical tensions," says market analyst Kathleen Brooks at XTB.
European stocks are extending gains despite Brent crude climbing above $94 a barrel as the US and Iran exchange fresh threats.
Brooks says this suggests investors remain focused on corporate earnings rather than geopolitical risks, with "no clear sign that this is causing panic in financial markets".
Turning to UK politics, she highlights questions for Andy Burnham from a former Labour minister about how the VAT cut to electricity bills in October will be funded.
UK bond yields are being kept "in check", she says, though the 10-year Gilt is still hovering around 5%, "an uncomfortable level for the new PM and Chancellor Healey, however, it has been well absorbed by markets so far".
Gilt yields have "diverged significantly" from their German counterparts, today, Brooks notes, "but this has barely impacted the FTSE 100 or the more domestically focused FTSE 250" as the corporate sector is "showing resilience".
11.06am: Bank of England rates to remain on hold this year
Lower food and services inflation is "welcome news" for the Bank of England hawks, says economist James Smith at ING, referring to those on the MPC who worry the UK is at risk of another persistent bout of price pressure.
"Though inflation is set to rise towards 3.5% later this year, we expect the Bank to keep rates on hold throughout 2026," he says, predicting that the MPC will look to cut rates gradually from spring 2027.
Core CPI of 2.6% was a tad above consensus, which Smith attributes to rising costs for iPhones.
"It looks like 'chipflation' has washed up on UK shores; portable device prices spiked by 22% month-on-month, the biggest monthly change since the series began in 2015. It’s possible that’s related to the Apple price hikes."
But that aside, Smith sees two reasons this data is good news for the hawks, the first of which is food prices recorded their second consecutive month-on-month fall - "highly unusual in recent history and echoes the equally benign food inflation story we’ve seen in many parts of Europe during Q2", though it would be expected to take "a good year or so" for the impact on food inflation to peak.
The second is that services inflation is cooling off: "Our calculation of the BoE’s preferred gauge of 'core services' inflation shows it falling from 3.8% to 3.6%, a sharper pullback than in the overall services index. The trend is encouraging and, coupled with low private-sector wage growth, suggests that domestically generated inflation is currently very benign."
10.42am: Reach shows how publishers being hit by Google AI overviews
Shares in Reach, the publisher of the Mirror, Express and Daily Star, are down 19% after half-year results showed a 40% collapse in page views for its news sites, driven largely by Google, leaving the company leaning ever harder on cost-cutting to protect profits.
Revenues fell 9%, with digital revenues down 11.4%, following a shift in how Google handles search, with the rollout of 'AI overviews' in its search engine results meaning that users increasingly get their answer on the results page and never click through to the publisher that produced the underlying journalism.
Google search referrals to publishers worldwide fell by roughly a third in the year to November, according to Chartbeat data, with referrals from the Google Discover feed down 21%.
That matters acutely for Reach, whose digital model has long depended on high volumes of casual visitors monetised through programmatic advertising, the automated auctions that sell ad space by the impression.
Indirect revenue, the volume-sensitive part of that mix, fell 16.2% in the half and 21.3% in the second quarter.
Print offered no shelter, with revenue down 8.3% to £178 million as circulation volumes dropped 22%.
Chief executive Piers North said the company was building greater independence from referral traffic through subscriptions and video.
In May, fellow publisher Future, which focuses less on news and more on product comparisons, reported first-half results slightly ahead of broker expectations, with analysts arguing the worst of the Google AI Overviews disruption may now be behind it.
Group revenue fell 8% to £349.1 million, with organic revenue down 6%, while EBIT dropped 27% to £73.2 million, marginally ahead of the broker's £72.8 million estimate.
The damage from Google's AI Overviews feature, which has diverted traffic away from publisher websites by answering search queries directly, was most visible in eCommerce affiliate revenue, which fell 24% organically.
Last month, Ladbible owner LBG Media tumbled after cutting full-year forecasts due to weakness in advertising revenue linked to search engine changes and social media persisting for longer than expected.
10.10am: Inflation does not change dial much for Bank of England next week
Some analysis of the UK inflation numbers earlier.
A key contributor to the slowdown in the annual rate of CPI was transport inflation, says Dan Smith, economist at Cebr, with this slowing from 6.8% year-on-year in May to 5.7% in June, driven in part by weaker motor fuel inflation.
"Easing price momentum in this category largely reflects the short-lived truce between Iran and the US, which allowed supply-side constraints in the region to begin to ease," Smith says.
"However, with hostilities having resumed, this disinflationary momentum is likely to fade. June was also the final month before the introduction of Q3’s higher Ofgem price cap, which is expected to cause inflation to accelerate in July.
"With greater pressures on the horizon, today’s data support Cebr’s forecast that the Bank of England Monetary Policy Committee will keep rates on hold at its July meeting."
Martin Sartorius, the CBI's lead economist, also says he expects the easing in inflation "will prove temporary... reflecting the ongoing impact of the Iran conflict on energy bills and some passthrough to domestic prices".
Ahead of the Bank of England’s meeting next week, he predicts the monetary policy committee will keep interest rates unchanged, maintaining its "wait and see" approach.
"Although risks remain elevated, a loosening labour market, soft domestic activity, and tighter financial conditions mean that the Committee is unlikely to raise rates in the near term," Sartorius says.
Jeremy Batstone-Carr, European strategist at Raymond James Wealth Management, says today’s headline drop in CPI compares with the MPC’s own 3.1% forecast for June.
"This is seen as a welcome relief from the uncertainty surrounding the extent to which rising energy prices might penetrate higher prices and wages," he says, adding that this comes on the heels of yesterday’s confirmation that domestic labour market conditions remain soft and average earnings growth remains contained.
"Price pressures are expected to intensify going forward, ensuring that the Bank of England remains vigilant.
"Financial markets are fully priced for a 0.25%-point rate hike before year-end and around 50% priced for another.
"There is, however, room for doubt. While the Bank’s primary remit is ensuring inflation is controlled, last week’s economic activity data confirmed that growth remains subdued. With inflation set to rise, households’ real incomes remain under severe pressure. Time will tell whether the newly installed Burnham cabinet can deliver a sustained improvement to the economy’s fortunes, but present unease further complicates the MPC’s calculus."
9.35am: Buses, rates and airline engines
With a new team in Downing Street, there have been several new policy announcements this week, and more today.
Bus fares across England will be capped at £2 from January, Andy Burnham has announced, continuing his efforts to chip away at the cost of living.
The cap on single bus fares in England will apply from January, down from a current cap of £3. The funding for the new cap includes money to allow devolved governments to put in place similar rules.
Last night there were reports relevant for Wetherspoons, with the Huffington Post reporting that the new Prime Minister is expected to unveil plans to raise business rates on large warehouses used by online retailers such as Amazon and Asos to help fund a 20% business rates cut for pubs, clubs and live music venues.
The proposed overhaul could raise more than £1 billion a year, according to reports, although warehouse operators and retailers have warned the move would increase costs across supply chains and ultimately lead to higher prices for consumers.
Elsewhere, the Telegraph said Rolls-Royce has urged the government to back a proposed £3 billion funding package for a new generation of short-haul jet engines, warning that failing to do so could put 40,000 UK jobs at risk.
Chief executive Tufan Erginbilgic said the FTSE 100 engineer would prefer to build the engines in Britain but was also in talks with overseas governments, including Germany, over potential support.
He warned the next two years would be critical as Airbus and Boeing prepare to select engines for their future narrow-body aircraft.
9.12am: FTSE hits four-month high
The FTSE 100 is starting to get up a slight head of steam, thanks to its bulk of commodities companies, with the index reaching its highest since the start of US and Israeli strikes on Iran back at the end of February.
Gold miner Endeavour is still topping the risers, up almost 3% now, followed by sector peer Fresnillo. Copper miner Antofagasta is up 1.2%
Oil producers BP and Shell, and British Gas owner Centrica, are all up 1.9-1.3%.
Aerospace and defence are extending their gains from yesterday too, with Melrose up 2.3%, followed by BAE and Rolls, both just above 1%.
The fallers are led by Games Workshop, down 2.6% to a month's low. Recent days have seen headlines about share purchases planned by Nick Train’s Finsbury Income and Growth fund, which also shared plans to add to existing holdings in London Stock Exchange Group, Sage and Relx.
8.59am: US tariffs on generic drugs
Hikma Pharmaceutical shares are down almost 1%, which seems not very much after Donald Trump announced a new package of tariffs on generic drugs last night.
In a social media post, the US President said the tariffs would come on 1 August 2028, "when a 100% tariff would be imposed for a one year period of time, and 200% thereafter".
Earlier this year he had warned that a decision on generic pharmaceutical tariffs would be "reassessed in one year".
Trump said the goal of the policy is to force drugmakers to build plants in the US.
8.47am: Greencore firmly in green
Shares in Greencore are top of the FTSE 250 risers after its positive Q3 update.
Guidance is for underlying profits of £234-242 million, which compares to a City analyst consensus of £224 million.
Q3 sales were as expected, says analyst Charles Hall at Peel Hunt, with pro forma volume growth of 0.7% as Greencore grew 0.3% and Bakkavor 1.0%.
"Greencore was muted due to weather at the start of the period and Bakkavor better with annualised business losses," says Hall, noting that profit improvement was driven by operational improvements helping margins.
The target of £80 million in cost synergies is unchanged but Hall says he expects these "to rise to >£100m".
8.27am: Spoons unable to pass on costs, or being political?
Wetherspoon's shares have sploshed 8% lower in early trades following its profit warning.
Analyst Greg Johnson at Shore Capital suggests that the World Cup is a factor in the LFL sales increase of 4.0% in the third quarter being slightly below expectations.
"We would see this as a solid performance given sports events traditionally benefit Spoons less, noting Marston’s comments yesterday regarding softer off-peak periods."
He adds: "Compared to peers, we continue to be surprised by management’s comments on costs, which suggest an inability to pass on cost inflation through its value-led pricing model, while elevated and volatile repairs could partly explain the shortfall and are difficult to forecast externally.
"Alternatively, does a highly publicised business beset by cost pressures suit a certain political narrative? Either way, it is a headache for investors."
8.15am: FTSE 100 opens lower
The FTSE 100 has opened modestly lower, though with a lack of conviction in any particular sector.
Early trades see the index down 14 points at 10,572.
The biggest fallers are stocks that are among the index's more volatile names, including Games Workshop, Entain, Sage, RELX and 3i Group.
Risers are more conclusive, with precious metals miner Endeavour Mining at the top of the leaderboard, up 2%.
Aerospace companies are up too, with Melrose and Rolls-Royce rising around 1%.
Oil giants BP and Shell are among the risers as well, with Brent crude oil up 2.6% now at $93.35 a barrel.
8.01am: Greencore and Mulberry
A couple more bits of company news before we look at opening prices.
FTSE 250-listed Greencore Group has upgraded its profit guidance after stronger-than-expected trading and an early boost from its takeover of Bakkavor helped it outperform the wider market.
Manufacturing volumes grew 0.7%, outperforming a grocery market that contracted by 0.4%, with the performance apparently helped by strong demand for products including quiche, sushi, chilled dips and bread.
Elsewhere, Mulberry reported a sharp reduction in annual losses and a return to revenue growth as its turnaround strategy gained traction, with trading accelerating into the new financial year.
The leather goods maker's pre-tax losses narrowed to £8.9 million from £32.2 million as revenues grew 4% to £125.5 million, with growth accelerating to 11% in the second half.
There was a swing to positive earnings (EBITDA) at £0.8 million compared with a £16.8 million loss a year earlier.
7.52am: Bloomsbury expects to get cash from Athropic settlement
Bloomsbury has announced that it will receive payments from Anthropic's $1.5 billion settlement over claims the AI company trained its models on copyrighted works without permission, after a US district court formally approved the deal.
The publisher said it has 14,087 titles covered by the settlement, with around $3,000 allocated per work before fees, split equally between the author and publisher.
Payments are expected to begin in the second half of the financial year.
7.35am: Wetherspoons profit warning
JD Wetherspoon has warned that profits are likely to come in below market expectations this year, due to intensifying cost pressures, despite another quarter of steady top-line growth.
Chairman Tim Martin says: "Profits for the year are likely to be below market expectations, with marginally lower sales than anticipated in the final quarter, combined with higher costs in the areas of food, labour, repairs, energy and business rates."
This compares to what he said in a profit warning in May, when he cautioned that rising costs "may result in profits slightly below market expectations".
7.23am: Core UK inflation unmoved in June
A recap on today’s inflation figures for June, where the CPI rate eased to 2.6% from 2.8% on an annual basis and to 0.1% from 0.2% month-on-month.
Core CPI held steady at 2.6%, while services inflation, a key measure watched by the Bank of England to see how sticky inflation is, eased to 3.6% from 3.7%, although both remained slightly above expectations.
"A fall in motor fuel prices, particularly diesel, helped ease inflation in June," says ONS chief economist Grant Fitzner.
"Food prices fell this month, driven by products including chocolate, margarine and beef. Clothing prices also fell with the start of summer sales, with bigger discounts than last year.
"The cost of raw materials dipped for the first time since January, mainly due to the lower price of crude oil, while the increase in the costs of goods leaving factories slowed again."
FTSE 100 Live: Blue-chips called higher as inflation softens
London's blue-chip shares are expected to continue rising on Wednesday, as the pound searches for direction following as easing in UK inflation.
On the futures market, the FTSE 100 has been called around 25 points higher, carrying the positive momentum from yesterday afternoon when the index closed up 61.15 points at 10,585.91.
UK inflation softened more than expected last month, according to fresh figures from the Office for National Statistics, with the headline consumer prices index slowing to a 2.6% annual rate in June from 2.8% in May.
Core CPI held steady at 2.6%, while services inflation, a key measure watched by the Bank of England, eased to 3.6% from 3.7%, although it remained slightly above expectations.
In the next monthly data, a sizeable upward shift is likely due to the hike in the Ofgem energy price cap at the start of this month.
On Wall Street last night, stocks finished sharply higher, with semiconductor stocks leading the Nasdaq to the front of the pack, climbing 1.3% to 25,837, while the S&P 500 rose 0.9% to 7,509 and the Dow Jones added 0.7% to close at 52,225.
Investors appear willing to look beyond the latest headlines from the Middle East as the US confirmed overnight they’d completed an 11th consecutive evening of strikes against Iran, which has sent Brent crude shooting up above $92 a barrel, after breaching $90 for the first time in a month earlier in the week.
