The FTSE 100 rose 0.2% to its highest level since January 11th, boosted by energy stocks, as escalating Middle East tensions drove oil prices higher earlier in the day.
BP and Shell climbed nearly 2% each. Crude prices later eased after surging on news of a drone attack on U.S. forces in Jordan, which added to supply disruption worries.
However, investors remained cautious ahead of interest rate decisions from the U.S. Federal Reserve and Bank of England later this week. Both central banks are expected to leave rates unchanged, but traders will closely monitor policymakers’ commentary for clues on potential cuts.
The UK’s consumer inflation expectations fell in recent months, which could influence the BoE towards signalling rate cuts.
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Ryanair profit plunges on weaker holiday travel demand
Ryanair shares dropped 2.9% after the airline cut its profit forecast, hurt by some online travel agents stopping ticket sales in December. Other airline stocks also declined.
Asset manager Schroders fell 4.4% after Exane BNP Paribas downgraded its rating on pressures in Schroders’ core business. Vape distributor Chill Brands plunged 28.2% as the UK looked to ban disposable vape sales to prevent youth usage.