Britain's main indexes gain over 1% on hopes of Middle East peace deal

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FTSE 100 up 1.1%, FTSE 250 up 1.5%

Energy stocks lag as oil prices fall

UK economy shrinks 0.1% in April

By Tharuniyaa Lakshmi

June 12 (Reuters) - Britain's shares edged higher on Friday after U.S. President Donald Trump said a peace agreement with Iran could be signed soon, while investors also assessed key economic data.

The blue-chip FTSE 100 index .FTSE rose 1.1% to 10,414.02 points by 1059 GMT, while the midcap FTSE 250 .FTMC climbed 1.5%. Both indexes were on track for weekly gains.

  • The deal, if confirmed, could end the three-month-old war, which sent oil prices sharply higher after Iran blockaded the Strait of Hormuz, a vital artery for global energy supply.

  • Most sub-indexes were in the green, except energy .FTNMX601010, which fell 3.6% after oil prices slipped more than 4% following the news. O/R

  • Homebuilders .FTNMX402020 led gains; Vistry Group VTYV.L was up 6.6%, and Bellway BWY.L and Persimmon PSN.L 4% each.

  • The travel and leisure .FTNMX405010 sub-index, which includes oil price-sensitive airlines, also advanced 3.6%. British Airways owner IAG ICAG.L and budget carrier Wizz Air Holdings WIZZ.L were among the top gainers.

  • On the data front, Britain's economy contracted 0.1% in April, its first monthly drop since August 2025, the Office for National Statistics (ONS) said.

  • ONS data showed the first clear signs of an impact from the U.S.-Israeli war on Iran on the country's economic growth.

  • “April’s data hints at what is to come, a summer of sluggishness which could edge into a technical recession as global conflict collides with domestic political uncertainty,” said Danni Hewson, head of financial analysis at AJ Bell.

  • Separately, the British public's expectations for inflation in the long term rose to a record high last month, the Bank of England's quarterly inflation attitudes survey showed on Friday.


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