UK shares clock weekly gains as Iran-US peace deal hopes push oil price lower

UK shares gained in a broad-based rally on Friday amid growing hoping of a peace agreement between Iran and the U.S., which sent crude oil prices lower, with both the midcap and blue-chip indexes clocking weekly gains.

The blue-chip FTSE 100 index closed 1.6% higher at 10,471.7 points, its highest closing level since May 27. The midcap FTSE 250 also jumped 1.6% - its best single-day percentage gain in over five-weeks.

• Both indexes also clocked an over 1% gain for the week.

• A Western source told Reuters that if language could be agreed upon, the memorandum could be signed as soon as Sunday by U.S. Vice President JD Vance and Iran's parliament speaker, Mohammed Baqer Qalibaf, with Geneva for now seen as the likeliest venue.

• Most FTSE 350 sub-indexes were in the green, except energy, which fell 1.8% after oil prices slipped more than 3%.

• The travel and leisure sub-index, which includes oil price-sensitive airlines, also advanced 3.9%. British Airways owner IAG and budget carrier Wizz Air Holdings were among the top gainers.

• Heavyweight banks jumped 4.2%, while aerospace and defence added 2.2%.

• McBride slid 14.6% after the private-label cleaning products maker warned profits over the next two years would fall short of expectations.

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

• "We had anticipated a growth slowdown in response to the energy shock, and the April data are starting to hint at that. We expect more weakness in consumer-related spending to come as inflation moves higher and restrains real incomes," J.P. Morgan analysts said in a note.

• 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.

(Reporting by Tharuniyaa Lakshmi and Shashwat Chauhan in Bengaluru; Editing by Sahal Muhammed and Joyjeet Das)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published June 12, 2026 at 9:37 AM.