London, June 21, 2026, 18:04 BST
- FTSE 100 slipped 0.35% to end Friday at 10,363.27. The index lost about 1% on the week.
- Prime Minister Keir Starmer may announce as early as Monday if he will resign or run in a Labour leadership race, Reuters reported.
- Britain’s flash business survey lands Tuesday at 09:30 BST. S&P Global puts out its UK consumer-sentiment index the day before.
London markets open Monday set for a political jolt, as mixed headlines about Starmer’s future threaten to move sterling, government bonds, and stocks with UK exposure early in the session.
Starmer may lay out plans for a managed exit as soon as Monday, The Observer said. But a government source told Reuters he is still concentrating on his work. A long contest could keep investors unclear on where the next government stands on tax, spend and borrowing.
FTSE 100 posts biggest weekly loss since May, miners slump
The FTSE 100 shed 1% last week, its worst drop in more than a month. The FTSE 250 pulled back 0.5%. Miners led the losses on Friday: Anglo American and Rio Tinto both fell 2.6%. BP ended up 2.8% and Shell advanced 1.1% as crude prices steadied. Gilts sold off, sending yields to the highest in a week. Saxo UK’s Neil Wilson said Burnham’s mandate may decide if markets get a “market-unfriendly approach” on borrowing and taxes. Reuters
Sterling didn’t give much direction. The pound edged up 0.25% to $1.3238 on Friday, boosted by Burnham’s solid win in parliament and a 1.2% jump in May retail sales. Still, it fell 1.2% for the week. “It still doesn’t answer the question of what he would do in power,” said Nick Rees, currency strategist at Monex Europe. Reuters
Britain’s public finances are tight. The government borrowed £23.3 billion in May, topping the £18.5 billion forecast from a Reuters poll. April and May borrowing totaled £46.3 billion, nearly £9 billion over the Office for Budget Responsibility’s March forecast. “Several questions remain over whether the current plans will be sufficient to reduce public borrowing,” EY ITEM Club adviser Matt Swannell said. Reuters
Monetary policy is still in the way. The Bank of England kept rates steady at 3.75% on Thursday. Two out of nine policymakers wanted a hike, up from just one last time. Schroders economist George Brown said “the bar for hikes remains high,” but warned that sticky inflation expectations might still push the bank to act. Reuters
Consumer sentiment is still mixed. GfK’s confidence index held at minus 23 in June. Big-ticket spending plans were still close to the lowest levels seen since early 2025. “Beneath the surface, there are new signs that confidence is weakening,” said Neil Bellamy, director of consumer insights at GfK. Reuters
Flash PMI data out Tuesday is set to give the first broad look at June business activity. The PMI measures above 50 point to growth, while below 50 means contraction. Last month, the final composite index dropped to 49.7, and services posted 49.3. That puts focus on whether June’s numbers steady or slip again.
Results season slows down, with fewer corporate updates than political and economic events this week. Investors will get final numbers from Wise, Halfords, Moonpig, Liontrust Asset Management, and Telecom Plus. On Thursday, the U.S. personal consumption expenditures price index lands. That’s the Fed’s go-to inflation number and could move global bond yields and the dollar.
First moves in the FTSE 100 can be deceptive. When the pound drops, large exporters in the index see the sterling value of their overseas earnings go up, which can help the headline number. But political worries still weigh on builders, retailers, and other companies more exposed to the UK economy. Sterling and gilts might show the real picture.
Downside risks aren’t just about Westminster. Talks between the U.S. and Iran look shaky and worries about supplies through the Strait of Hormuz are back in focus. If oil prices spike again, BP and Shell could get a lift, but transport costs would go up, inflation expectations might climb and shares that are sensitive to rates could come under more pressure. Throw in a messy Labour leadership contest and last week’s losses could deepen.
