FTSE 100 Closes at 10,330, Down 1.24% on Iran Escalation; Brent at $98.20
The FTSE 100 closed at 10,330 on Monday, down 1.24% on the day in a clean reversal of last week’s Iran-deal-optimism rally. Brent crude closed at $98.20 a barrel, up 4.70% on the day. UK 10-year gilt yields rose to 5.08%, well back above the 5% line. Sterling weakened to $1.3395 against the dollar. Gold firmed to $4,495 an ounce. The VIX is up almost 16% on the renewed war-risk premium. Defence stocks BAE Systems, Babcock and Melrose led the FTSE gainers; oil majors BP and Shell were mixed.
The Monday close completes the cleanest single-day reversal of the Friday-Iran-deal-optimism trade. If Iran follows through on continued Hormuz closure and the framework deal is formally abandoned, Brent is likely to test $105-115 within 48-72 hours and the FTSE could fall another 2-3% from current levels. UK Treasury / Bank of England fiscal-policy positioning is now under direct macro pressure: the gilt-yield reversal to 5.08% materially tightens the Reeves cost-of-living-package fiscal headroom calculation, and the inflation pass-through from Brent-above-$95 will reset the Bank Rate cut probability for the next MPC meeting. The Ofgem October price-cap reset will absorb less of the July 13% hike than the Friday pricing implied. The Bank of England Monetary Policy Committee’s next decision is now the binding macro variable.