London's blue-chip benchmark started the week on firmer footing as investors digested renewed unrest in the Middle East and prepared for a Bank of England rate announcement later this week. At 0809 GMT the FTSE 100 was up 0.5%, while the British pound strengthened 0.2% against the U.S. dollar to 1.3249.
Across continental Europe, Germany's DAX rose 0.2% and France's CAC 40 was higher by 0.2% as sentiment in early trading took a cautiously positive tone.
Summary of market drivers
Geopolitical developments in the Gulf are keeping energy and macro risk elevated, after reports that tanker traffic through the Strait of Hormuz has been effectively shut by Iran. On the policy front, attention is turning to the Bank of England as investors weigh forecasts and the central bank's next move. Separately, corporate results from Standard Life and Marshalls provided mixed signals on operational performance and accounting impacts. UK housing data showed a small monthly rise but a slight year-on-year decline.
Iran and maritime tensions
U.S. President Donald Trump has urged seven countries to assist Washington in maintaining security through the Strait of Hormuz, a strategic corridor that conveys about a fifth of the world's oil supply, although he did not indicate whether any of those nations had agreed to participate. Sources in the market noted that tanker traffic through the strait, which is bounded on three sides by Iran, has been effectively shut by Tehran. That disruption has put upward pressure on energy prices and is weighing on the economic outlook globally.
UK policy outlook and economic expectations
Citi's latest view, cited by market participants, is that the Bank of England's Monetary Policy Committee will keep the Bank Rate at 3.75% at its meeting on Thursday. Citi has removed an April cut from its forecast in light of another energy shock stemming from the Middle Eastern conflict. The bank projects the ultimate cutting cycle to end at 3.25%, and expects cuts in June and September - a revision from its previous terminal rate forecast.
Corporate developments
Standard Life PLC reported a narrower full-year 2025 statutory loss after tax of 394 million, down from 1.08 billion a year earlier. However, 604 million in hedging-related accounting charges offset a 15% rise in adjusted operating profit. Those charges were tied to the company's program to protect Solvency II capital against equity and interest rate movements. Market commentary noted that the FTSE 100 rose 21.5% in 2025, which worked against the hedges under IFRS rules while leaving cash generation intact. The company, which adopted the Standard Life name three weeks ago following a rebrand from Phoenix Group Holdings, saw accounting effects outweigh operational improvements during the period.
In a separate trading update, Marshalls PLC said full-year profit before tax for the year ended Dec. 31, 2025 fell 55% to 17.7 million, even as revenue rose 2% to 632.1 million. The British building products manufacturer reduced its dividend for a second consecutive year. Basic earnings per share dropped 54% to 5.7 pence from 12.3 pence, and reported operating profit declined 41% to 32 million from 53.9 million. The company proposed a total dividend of 6.7 pence, down 16% from 8 pence a year earlier, while net debt increased to 137.9 million from 133.9 million.
Housing market snapshot
Data from Rightmove indicated that UK asking prices rose 0.8% in March, adding just over 3,000 to reach an average of 371,042. Despite the monthly lift, prices were 0.2%, or 744, lower than in the same period a year earlier. Analysts pointed out that the monthly increase is consistent with typical seasonal spring patterns, while the year-on-year dip aligns with commentary from UK housebuilders that house price inflation has stalled.
What to watch this week
Market participants will be focused on the Bank of England's decision later in the week and on any further developments in the Middle East that could influence energy markets and risk sentiment. Corporate earnings and accounting disclosures, such as those from Standard Life and Marshalls, will continue to shape investor assessments of individual stocks and sectors, particularly within financials and building products.