Source: Sharecast
At 0850 BST, the FTSE 100 was down 0.1% at 10,817.69, with a relatively quiet session expected as US markets will be closed for Labor Day. At the same time, Brent crude was up 1% at $97.20 a barrel and West Texas Intermediate was 0.6% higher at $92.08.
Susannah Streeter, chief investment strategist at Wealth Club, said: "As the war with Iran appears even more entrenched, energy prices are on the rise again, creating a mood of caution. As inflationary risks stay elevated the FTSE 100 has fallen back as traders keep a close eye on Brent Crude, the benchmark which has scurried back above $97 a barrel. The moves come after attacks between the US and Iran intensified. American forces have targeted three oil tankers, after Iranian strikes on US warships.
"With the US trying to maintain a blockade on Iran crude exports, and the strikes from both sides turning the Strait of Hormuz into dangerous waters, supply concerns keep swirling. The energy crunch deep in a chronic phase but risks turning more acute with $100 a barrel prices back in sight.
"While higher crude prices are a bonus for oil majors, it’s a big headache for other industries, as the costs of keeping the light on, customers warm, and factories whirring becomes more onerous. They raise inflationary risks too, with the prospect of companies passing on the higher overheads as higher prices. Those hoping for relief from higher borrowing costs have been left sorely disappointed, with markets pricing in multiple hikes.
"Streeter said the Bank of England is forecast to raise rates potentially three times over the next year, while the Fed is also expected to start another hiking cycle, especially after the strong jobs numbers which landed on Friday."
On home shores, the latest data from Lloyds showed that annual house prices fell in August for the first time since November 2023 as the market remained subdued. Prices were down 0.2% on the month following a 0.1% drop in July. On the year, prices declined by 0.4% in August following 0.1% growth the month before.
The average price of a home stood at £298,468, down from £299,153.
Northern Ireland continued to record the UK’s strongest annual growth, at 6.9 %, while Scotland also continued to see solid growth, with prices rising 3.5% over the past year. Annual growth in Wales stood at 0.6% in August, while within England, growth remained strongest in northern regions, Lloyds said.
By contrast, price growth across much of southern England remained under pressure, reflecting the greater affordability challenge caused by higher average prices. The South East saw the largest decline, with prices down 1.6% year-on-year, followed by Greater London, where prices fell 1.5%.
Andrew Asaam, mortgages director at Lloyds, said: "The housing market has faced a more difficult backdrop in recent months, with the impact of global events on inflation and borrowing costs creating greater economic uncertainty. What we're not seeing is a rush of homeowners cutting prices. But more are choosing to sit tight, with sellers reluctant to accept offers they feel are too low, while some buyers are waiting to see how conditions develop.
"As a result, fewer homes are changing hands, with latest industry figures showing mortgage approvals now at their lowest level since the start of 2024. It's also important to keep recent price movements in perspective. Average house prices remain around 25% higher than they were at the end of 2019, despite the substantial increase to interest rates seen over recent years. The market's adjustment to higher borrowing costs has been gradual, with wage growth helping to offset some of the pressure on affordability. The recent modest declines in prices are best viewed in that wider context.
"We expect the market to remain fairly subdued in the months ahead, but this will likely only have a limited impact on house prices. While affordability remains a challenge, wages continue to grow and employment has held up better than many anticipated. This will help to support demand from those who need or want to move."
In equity markets, Spire Healthcare gained as it agreed to be taken over by Tulip UK Bidco, a new company which comprises investment firm Toscafund, private equity firm Three Hills and US investment manager Ares, for £1.03bn.
Under the terms of the deal, Tulip UK Bidco will pay 250p per share in cash for Spire, which is a 66.2% premium to the closing share price on 13 May, the last business day prior to the possible offer announcement.
Ashmore was in the black as it reported a rise in full-year profit and assets under management, while Standard Life nudged lower despite posting a stronger‑than‑expected 25% jump in first‑half profit, lifted by solid new business flows and buoyant demand in the pension‑risk transfer market.
Market Movers
FTSE 100 (UKX) 10,817.69 -0.12%
FTSE 250 (MCX) 24,578.51 -0.03%
techMARK (TASX) 6,079.06 0.03%
FTSE 100 - Risers
BP (BP.) 548.00p 1.54%
Games Workshop Group (GAW) 18,700.00p 1.36%
Babcock International Group (BAB) 995.40p 1.23%
Admiral Group (ADM) 3,860.00p 1.21%
Melrose Industries (MRO) 508.60p 1.11%
Marks & Spencer Group (MKS) 391.00p 0.95%
Shell (SHEL) 3,462.00p 0.90%
Diploma (DPLM) 7,185.00p 0.84%
BAE Systems (BA.) 1,966.00p 0.69%
Rolls-Royce Holdings (RR.) 1,497.60p 0.67%
FTSE 100 - Fallers
Diageo (DGE) 1,623.50p -2.75%
Fresnillo (FRES) 3,062.00p -2.42%
Haleon (HLN) 344.20p -2.27%
Burberry Group (BRBY) 1,088.00p -1.85%
Smith & Nephew (SN.) 1,047.00p -1.74%
British Land Company (BLND) 412.80p -1.62%
Autotrader Group (AUTO) 496.50p -1.60%
Entain (ENT) 519.60p -1.59%
Convatec Group (CTEC) 225.00p -1.49%
Unilever (ULVR) 4,688.50p -1.45%
FTSE 250 - Risers
Ceres Power Holdings (CWR) 422.60p 7.40%
Baltic Classifieds Group (BCG) 2.60p 4.51%
AEP Plantations (AEP) 205.00p 4.38%
Diversified Energy Company (DI) (DEC) 1,170.00p 3.72%
Spire Healthcare Group (SPI) 245.50p 3.15%
Energean (ENOG) 794.00p 2.64%
Raspberry PI Holdings (RPI) 611.25p 2.56%
Partners Group Private Equity Limited. (EUR) (PEY) 7.40p 2.49%
Harbour Energy (HBR) 265.00p 2.40%
Premier Foods (PFD) 200.00p 2.35%
FTSE 250 - Fallers
Rank Group (RNK) 98.70p -3.80%
Target Healthcare Reit Ltd (THRL) 110.00p -2.65%
Johnson Service Group (JSG) 140.00p -2.64%
Trustpilot Group (TRST) 274.60p -2.34%
Mitchells & Butlers (MAB) 272.50p -2.33%
Michael Page (PAGE) 211.00p -2.22%
Hays (HAS) 68.35p -2.08%
Great Portland Estates (GPE) 328.60p -1.97%
Globaldata (DATA) 72.90p -1.75%
Bytes Technology Group (BYIT) 416.20p -1.51%