London, June 12, 2026, 17:45 BST
- FTSE 100 jumped 1.6% to finish at 10,471.7, the strongest close since May 27.
- Banks, miners and travel stocks pushed higher. Energy shares slipped as oil prices dropped.
- The next big event is the Bank of England rate decision set for June 18.
UK stocks rallied on Friday, with investors piling back into risk as hopes picked up for a possible peace deal between Iran and the U.S., which helped take some pressure off oil prices and stocks hit by inflation worries. The FTSE 100 jumped 1.6% to end the session at 10,471.7 points. The FTSE 250 also advanced 1.6%, posting its strongest one-day percentage gain in over five weeks, Reuters reported.
Cheaper oil helped UK stocks today, easing cost concerns for transport, consumer and industrial names. Calmer geopolitics also boosted demand for equities. Travel and leisure rose 3.9%, led by airlines sensitive to oil moves. Banks gained 4.2%. Aerospace and defence were up 2.2%. Most FTSE 350 sectors ended higher, except for energy, which dropped 1.8% as crude prices tumbled over 3%.
Banks helped drive the move, with Trading Economics data showing HSBC up around 4%, Lloyds Banking Group up 4.1%, and Barclays gaining close to 5%. NatWest added 3.6%. Standard Chartered rose 4%. Miners moved higher too—Rio Tinto gained almost 3%, and Anglo American, Antofagasta, and Fresnillo were all up over 5%. Shell and BP slipped as energy producers were hit by lower crude prices.
Stocks advanced even as UK GDP slipped in April, down 0.1% for its first monthly fall since August, according to Reuters citing the Office for National Statistics. Services output dropped 0.2%, with UK entertainment and support-services hit by Middle East event cancellations. RSM chief economist Thomas Pugh said higher energy and debt costs could “bring growth almost to a standstill” for the rest of the year. Reuters
Inflation expectations are still a main worry for the market. The Bank of England’s latest survey showed the public’s median one-year inflation forecast up to 4% in May, up from 3.2% in February. Five-year expectations climbed to 3.9%, a new high since the series began in 2009. These inflation expectations matter because if people and companies see faster price growth ahead, pay and pricing decisions can push inflation up and force rates to stay higher for longer.
Traders are watching the Bank of England’s June 18 Monetary Policy Committee decision for the next big move in UK stocks. The central bank has Bank Rate set at 3.75% and will review it again on June 18. Bank Rate is the main rate for borrowing across the UK economy. If the bank sends a dovish signal, that could lift housebuilders, retailers and mid-caps. But a hawkish tone may weigh on rate-sensitive names and push up the discount rate investors apply to future earnings.
FTSE 100 may get a boost from lower oil, easing geopolitical fears, and gains in banks, miners and travel names. That could let it build on this week’s rise. The index still yields about 3.06%, London Stock Exchange data show. Dividend yield measures annual payouts as a share of the current price, and can draw buyers looking for income if earnings hold up.
Friday’s rally pushes the FTSE 100 near the top of its 52-week band—8,707.65 to 10,934.94—even as growth slows, inflation picks up, and the London market deals with more listing pressure after Flutter decided to quit the LSE in August. Based on today’s facts, UK equities look priced in line with history, not cheap. They offer yield and leverage to any cyclical upturn, but could face trouble if oil jumps, the Bank of England turns hawkish, or soft UK growth eats into earnings.
