London, May 16, 2026, 18:05 (BST)
- The London Stock Exchange didn’t open Saturday. The LSE holds regular trading hours Monday to Friday, 8:00 a.m. to 4:30 p.m. local time.
- FTSE 100 dropped 1.7% to 10,195.37 Friday, posting its steepest single-day slide in over eight weeks and closing its fourth week of losses.
- Markets open Monday as traders focus on UK political risk, moves in oil, gilt yields, and the April inflation data due Wednesday.
FTSE 100 dropped the most in over two months, leaving British stocks on the defensive to start the new week. UK assets were pressured by political worries at home, pricier oil, and falling bond prices.
FTSE 100 drops as investors look ahead to Monday open With markets shut on Saturday, investors are left to assess Friday’s losses and what it means for the start next week. The FTSE 100 closed down 1.7% at 10,195.37. The FTSE 250 fell around 1%. Both the FTSE 100 and FTSE 250 were down for the week.
UK growth numbers lit a rally, but markets hit trouble as talk turned to political risks and higher energy prices possibly tightening financial conditions. That comes right as the Bank of England weighs its next inflation move. Gilt yields show what investors want for holding UK government debt—when those yields climb, so do borrowing costs.
UK stocks came under pressure Friday after Greater Manchester Mayor Andy Burnham said he plans to run for Parliament, possibly setting up a run to challenge Prime Minister Keir Starmer. Reuters said investors are worried that if a successor is further left, it could mean more spending and higher borrowing. “Markets won’t like it,” said Neil Wilson, investor strategist at Saxo UK. Reuters
Sterling dropped to a five-week low, off nearly 2% against the dollar this week and on track for its biggest weekly loss since November 2024. Ten-year gilt yields jumped, as bond yields move opposite to prices. The pressure wasn’t only in stocks. Jefferies economist Mohit Kumar said the market’s worry was Burnham could take a more left-leaning stance and deficits might climb.
Oil was another weight. Brent crude climbed more than 2% on Friday, with traders looking at the chance of escalation in the Iran conflict and a possible hit to Strait of Hormuz flows. Higher oil is a problem for the UK, which imports more energy than it exports. That can push up inflation and put pressure on consumers.
Rate risk stayed in focus. A Reuters survey out this week said most economists see the Bank of England holding Bank Rate at 3.75% into 2026, but about 40% think there will be at least one hike by year-end. Markets are pricing in two hikes. Elizabeth Martins, senior economist at HSBC, said the bank is moving its UK base case on the Middle East conflict “from the good to the bad.” Reuters
UK GDP posted a 0.6% rise in the first quarter and 0.3% growth for March, official figures showed Thursday, with services gaining 0.8% during the quarter. Rob Wood of Pantheon Macroeconomics told investors not to jump to conclusions about the trend. George Brown at Schroders pointed out that UK GDP often shows a strong start to the year before losing momentum.
Selling hit most sectors. Precious metal miners dropped 7.7% as gold and silver prices slid. Utilities, seen as a bond proxy for their steady payouts, lost 7.5%. Hiscox surged 12.3% after media said Canada’s Intact Financial might bid for the insurer.
Europe’s STOXX 600 fell 1.5% on Friday, ending the week lower. Germany’s DAX shed 2.1%. Michael Hewson at iForex called energy prices “the biggest problem facing Europe.” Daniel von Ahlen at GlobalData TS Lombard said markets that depend more on foreign energy imports felt the pressure. The UK market followed Europe’s move. Reuters
UK lenders may be in focus at the open on Monday, after Reuters reported Saturday, citing Sky News, that the government could outline more detailed plans next week to loosen bank ring-fencing rules. Ring-fencing separates retail and investment banking, aimed at containing risk. The Reuters report said the new proposals might allow big banks to share more services and cut costs.
Labour-market data is coming from the Office for National Statistics on Tuesday, followed by April CPI numbers at 7:00 a.m. Wednesday. March’s CPI was 3.3%, still above the Bank of England’s 2% target. A stronger April reading could push the rate-hike debate further.
Trading Economics sees the UK benchmark at around 10,132 by quarter’s end, under Friday’s close. The number drops to 9,551 in a year, according to the same model-driven forecast. It’s not a specific trade idea, but reflects the softer tone in the index lately.
But it’s not all downside risk. If oil prices fall, if the leadership question settles down or new bank regulations help the lenders, Monday could turn steadier. The flip side is clear: if crude rises, gilt yields jump again and traders start betting on more rate hikes, the FTSE 100 stays exposed after losing ground for four weeks.
