British stocks traded down on Thursday morning as a steep slide in crude prices weighed on energy heavyweight names, even as official labour data showed pay growth beating expectations and unemployment unexpectedly easing.
As of 03:25 ET (07:25 GMT), the FTSE 100 was 0.54% lower, underperforming several continental peers. Germany's DAX advanced 0.46% and France's CAC 40 rose 0.25% as investors interpreted diplomatic moves in the Middle East as a reduction in geopolitical risk.
The United Kingdom's labour report painted a mixed picture for policymakers. Average weekly earnings excluding bonuses held at an annual pace of 3.4% in the three months to April, topping the economist consensus of 3.2%. Total pay including bonuses increased by 4.4% year-on-year, underlining persistent wage pressures. At the same time, the unemployment rate unexpectedly declined to 4.9% from 5%.
Yet some indicators signalled easing in labour demand. Job vacancies fell by 19,000 to 707,000 in the three months to May, marking the lowest level since early 2021, and the claimant count rose in May, consistent with a gradual softening in demand for labour.
Market participants were also digesting geopolitical developments after the United States and Iran signed a 14-point agreement intended to restore Iranian oil exports, reopen the Strait of Hormuz and set a framework for broader negotiations within 60 days. Initial talks to implement the pact are expected to begin in Switzerland on Friday. Officials and observers have generally welcomed the accord, arguing it could strengthen energy security and cut risks to key trade routes.
Energy benchmarks fell on the news. Brent crude dropped 1.5% to $78.35 a barrel, while U.S. WTI lost 2% to trade at $75.28 a barrel as traders priced in the potential return of Iranian exports and the reopening of the Strait of Hormuz. Precious metals moved in the opposite direction, with spot gold rising 1.1% to $4,305.84 an ounce.
UK corporate round-up
Informa reported resilience in its recovery from earlier disruptions, saying underlying revenue grew 6.4% in the first five months of 2026 and reconfirming full-year earnings guidance while flagging stronger growth in 2027.
Tesco posted first-quarter UK like-for-like sales growth of 1.8%, a figure below analysts' forecasts. The retailer attributed ongoing consumer caution to uncertainty related to the Middle East conflict, though it maintained its full-year profit guidance.
With the Bank of England decision looming, investors are balancing signs of still-elevated wages and an unexpectedly lower unemployment rate against softer job openings and recent commodity moves. The net effect on the FTSE 100 has so far been negative, led by declines in energy-related stocks as crude prices adjust to the changing geopolitical and supply outlook.