UK's FTSE 100 Jumps on Renewed Optimism Over US-Iran Deal; British Economy Shrinks
Britain's FTSE 100 index ended the trading week 1.63% higher, buoyed by renewed investor optimism over an interim peace agreement between the US and Iran.Washington and Tehran could sign a deal to reopen the Strait of Hormuz next week on the sidelines of the Group of Seven summit in Switzerland, Bloomberg News reported, citing senior officials. The terms of the memorandum of understanding are still subject to approval by Iran's Supreme Leader Mojtaba Khamenei, an unnamed European official told the news outlet.News of a potential deal sent oil prices down over 2% on Friday. BP (BP.L) and Shell (SHEL.L) also tumbled 1.98% and 1.69%, respectively, making them the two biggest losers on the blue-chip index.In corporate news back home, Flutter Entertainment (FLTR.L) plans to delist its ordinary shares from the London bourse on Aug. 3, but will continue to list in New York. The online sports betting and gaming company edged down 3.33% in London at close.On the economic front, Britain's monthly gross domestic product fell 0.1% in April 2026, in line with expectations, following a 0.3% rise a month ago, data from the Office for National Statistics showed. The latest figure, which marks the first economic contraction since August 2025, was driven by a fall in services, offset by growth in construction. Meanwhile, production stagnated during the month."While UK GDP grew by 0.7% in the three months to April, the contraction in April is more indicative of growth prospects for the economy going forward. We expect UK GDP growth to slow in the second quarter," according to Yael Selfin, vice chair and chief economist at KPMG in the UK.The week ahead will see a barrage of economic data in the UK, including inflation, labor market figures, the Bank of England's interest rate decision, retail sales, and public sector net borrowing.
