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FinanceFTSE 100 set to open lower; Trump pauses Iran strikes amid Hormuz talks
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The FTSE 100 is expected to open lower on Monday, with futures indicating a 19-point drop (0.18%), following a week of renewed Middle East hostilities. Brent crude oil reached a two-month high of $100 per barrel on Thursday before easing slightly on Friday. Over the weekend, US President Donald Trump paused strikes on Iran as an Omani delegation pursued negotiations to secure shipping transit through the Strait of Hormuz. On Sunday, an oil tanker exploded after hitting a naval mine in the Strait, according to Iran's Tasnim news agency. The Bank of England's Monetary Policy Committee is widely expected to hold interest rates on Thursday, but RSM UK chief economist Thomas Pugh warned that if oil prices remain near $100 per barrel, a September rate hike could become likely. The FTSE 100 defied global caution last week, gaining 1.3%.
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Welcome back to City AM's FTSE 100 live blog (AP/PA Images)
It’s Monday morning, and the FTSE 100 is expected to open lower, with futures indicating a loss of 19 points, or 0.18 per cent.
This follows a week marked by renewed hostilities in the Middle East, as Iran and the US traded blows and the Houthis threatened to open a new permanent front to the conflict in the Red Sea.
Brent crude oil prices jumped to a two-month high of $100 per barrel on Thursday, before easing slightly on Friday. Despite the investor caution affecting many other leading global markets, the UK’s blue-chip index defied the trend, gaining 1.3 per cent over the week.
Key Developments
- US President Donald Trump said over the weekend that he is pausing strikes on Iran, as an Omani delegation pursues critical talks to secure a deal managing shipping transit through the Strait of Hormuz.
- On Sunday, an oil tanker exploded after hitting a naval mine in the Strait, according to Iran’s semi-official Tasnim news agency.
Bank of England in Focus
Last week’s renewed tensions in the Middle East will be at the forefront of the Bank of England’s Monetary Policy Committee (MPC) meeting, where it is widely expected to vote to hold interest rates on Thursday.
Thomas Pugh, chief economist at RSM UK, said he believes oil prices will “largely” steer the path of interest rates for the next year.
“If they remain close to $100 per barrel over the summer, a September rate hike would move firmly onto the table, with another in the winter likely,” he said.
We’ll be bringing you the latest market updates and analysis as the day develops.
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FTSE 100 Expected to Drop; Trump Pauses Iran Strikes Amid Hormuz Talks