The FTSE 100 closed down 0.4% at 10,233.07 on Friday, dropping 1.4% across the week as renewed Gulf clashes put the U.S.-Iran ceasefire in doubt and Labour’s local election setbacks sapped domestic confidence. It was the index’s third consecutive weekly decline.
The FTSE 250 fared better, managing a 1.7% weekly gain, while AIM added 2.0% – a clear split between globally exposed blue-chips and more domestically-focused smaller companies.
Oil back above $100
Energy markets drove much of the pressure. AJ Bell’s investment director Russ Mould said fresh clashes in the Strait of Hormuz have “extinguished some of the hope” for a near-term U.S.-Iran agreement, with Brent crude for July quoted at $101.49 a barrel on Friday, up from $97.76 at Thursday’s London close.
Nerves over Middle East developments kept European stocks on edge, with worries that pricier energy could slow growth and pressure inflation. A stronger pound added to the squeeze, weighing on the FTSE 100’s many multinationals who earn the bulk of their revenues overseas.
IAG issues profit warning
British Airways parent IAG dropped 2.8% after flagging that annual profits are running below expectations, citing jet fuel costs set to jump by €2 billion in 2026 versus 2025 amid the ongoing conflict.
The company noted it has hedged 70% of its 2026 fuel needs, and CEO Luis Gallego said there are “no issues with fuel availability” in IAG’s core markets. IAG’s warning places it alongside Air France-KLM and easyJet, both of which have cited similar fuel cost headwinds.
EasyJet fell 3.1% on the day. IAG’s Q1 operating profit jumped 77.3% to €351 million, but the full-year outlook overshadowed the strong quarterly result.
Intertek holds firm against EQT
Intertek shares fell 6% after the board unanimously rejected a third takeover approach from private equity firm EQT, dismissing a bid of £58 per share – which valued the business at approximately £8.93 billion – as significantly undervaluing the company and carrying material execution risk.
EQT must now either table a firm offer by 5pm on 14 May under the UK Takeover Code’s “put up or shut up” rule, or walk away entirely. Intertek is instead asking investors to back its own break-up plan – a review examining whether to separate its Testing & Assurance and Energy & Infrastructure divisions, arguing the split could generate superior shareholder value.
JD Sports and BT buck the trend
JD Sports Fashion rose 4.4% after reporting full-year sales growth of 10.5% to £12.7 billion, though the group widened its earnings guidance to £750m-£850m – below the prior year’s £852m profit figure – and said it is monitoring the Middle East situation carefully despite having no direct exposure. BT Group was the index’s standout gainer, rising 5.6%, while Whitbread added 2.8%.
Politics adds to the pressure
Gilt markets offered a mild relief signal as sterling climbed and 10-year gilt yields slipped 7 basis points to 4.875% after Prime Minister Keir Starmer pledged to remain in office. But political risk is far from resolved. Reform UK picked up over 1,000 council seats in England, and more than 20 Labour lawmakers – some publicly, others behind closed doors – have urged Starmer either to reconsider his position or lay out a timeline for stepping down.
Housing market softens
Halifax reported UK house prices slipped 0.1% in April, leaving annual growth at just 0.4% and the average home price at £299,313 – the weakest annual gain since December. Amanda Bryden, head of mortgages at Halifax, noted that “recent global developments have introduced a greater degree of uncertainty” into the housing market. With oil prices still elevated and political uncertainty at home, the FTSE 100 heads into next week with few obvious catalysts for a sustained recovery.