UK share markets declined on Wednesday as renewed hostilities in the Middle East sent crude oil prices higher, dampening broader market sentiment. The blue-chip FTSE 100 index experienced a 0.4% fall, while the midcap FTSE 250 saw a 0.8% decrease. Both indexes have largely remained range-bound this week as investors weighed ongoing geopolitical developments alongside fluctuations in global technology shares.
Escalating hostilities, including Iranian attacks and U.S. military strikes near the Strait of Hormuz, showed little sign of abating. This instability propelled oil prices up by approximately 2%, subsequently boosting shares of UK energy firms by 1.6%. Concurrently, an S&P Global survey indicated that British services firms experienced a slight drop in activity in May, as pressures from the Iran conflict drove up costs sharply and dented business optimism. The gauge for input cost inflation, though falling slightly in May, remained the second-highest since December 2022.
In individual company news, British private equity firm Bridgepoint Group fell 9.8% following Switzerland’s Partners Group’s decision to cap withdrawals from an $8.6 billion private equity fund. Investment manager Ninety One also saw its shares decline by 4.6% after analysts noted smaller-than-expected net inflows during the second half of fiscal 2026. Conversely, British discount retailer B&M bucked the trend, with its shares jumping 16.1% after reporting a smaller-than-expected drop in annual pretax profit. Online fashion retailer Debenhams Group also surged 14.4%, driven by a return to growth with a 0.5% rise in first-quarter gross merchandise value and a “substantial” increase in core profit. LSEG data indicates financial markets anticipate an almost 90% chance of the Bank of England maintaining borrowing costs at 3.75% in its June 18 announcement.
