London equities recorded a modest retreat on Thursday as uncertainty tied to Israeli strikes in Lebanon kept investors cautious despite a recent rally following ceasefire news. At 12:05 GMT the FTSE 100 was down 0.2% while the pound was firmer against the dollar, with GBP/USD up 0.1% to 1.3423.
Across continental Europe the moves were larger: Germany's DAX fell 0.7% and France's CAC 40 slipped 0.6% as risk appetite cooled.
UK policy and credit developments
The Paris-based Organisation for Economic Co-operation and Development urged Chancellor Rachel Reeves to implement a broad overhaul of the United Kingdom's tax framework. The OECD said simplification is necessary to help restore weak growth momentum and recommended a comprehensive review aimed at boosting efficiency and making the tax system more supportive of growth. Its advice included cutting distortions, tightening loopholes, and phasing out tax breaks and exemptions that lack clear economic or social value.
On credit conditions, the Bank of England's Credit Conditions Survey for Q1 2026 reported that secured credit availability to households rose in the three months to the end of February 2026. Lenders surveyed expect that availability to increase further in the three months to the end of May 2026. The survey, conducted between February 23 and March 13, found that unsecured credit availability to households remained unchanged in Q1, though lenders anticipate an increase in Q2.
For businesses, overall corporate credit availability was unchanged in Q1, but lenders separately reported increases for small, medium and large firms during the same period. These mixed signals on lending availability frame part of the domestic economic picture alongside fiscal reform recommendations.
Corporate move
British American Tobacco PLC announced a leadership change in its finance function. Dragos Constantinescu will join the tobacco group as Chief Financial Officer and Executive Director, effective September 1. Constantinescu is currently CEO of Asahi Europe & International and has been with Asahi Breweries since 2019. His roles at Asahi Breweries have included senior leadership positions across Europe, notably Managing Director for Czech, Slovakia, Germany & Austria, and Managing Director for Romania & Hungary.
Market participants remain attentive to geopolitical developments in the region and to domestic policy signals, both of which are likely to influence sentiment and risk pricing in UK and European markets in the near term.