London equities moved lower on Tuesday as investor optimism around a possible U.S.-Iran agreement faded following a fresh impasse in negotiations and renewed talk from the U.S. administration of military options.
At 03:11 ET (07:11 GMT), Britain’s blue-chip FTSE 100 was down 1.13%. Germany’s DAX fell 1.2% and France’s CAC 40 slipped 1%. Sterling also weakened, with GBP/USD trading 0.52% lower at 1.3540.
The tone from Washington contributed to market caution. Speaking to reporters in the Oval Office on Monday, President Trump dismissed Iran’s latest negotiating reply as a "piece of garbage," adding that the ceasefire was "on life support." He said: "It’s unbelievably weak," and added, "I would say it’s one of the weakest, right now, it’s on life support."
In separate comments to Fox News, the president said he was weighing restarting Project Freedom, a naval operation to escort vessels through the Iran-blocked Strait of Hormuz that he had halted last week after roughly a day. Mr. Trump said any renewed effort would be "only a piece" of a broader military operation.
A US official told The Times of Israel that Mr. Trump convened a high-level security meeting in the White House Situation Room on Monday to consider next steps on Iran. Israel’s Channel 12, citing two senior US officials, reported that Mr. Trump is considering renewed strikes to increase pressure on Tehran, quoting one official saying, "Trump is going to hit them a bit."
Tehran pushed back publicly. Iran’s parliament speaker Mohammad Bagher Ghalibaf wrote on X that the country was "prepared for all options" and that Washington had "no alternative but to accept the rights of the Iranian people" as outlined in Iran’s 14-point proposal.
Within the UK market, a number of company updates illustrated the conflict's economic ripple effects. Online holiday operator On the Beach reinstated its full-year adjusted pretax profit forecast at 18 million to 25 million, well below analyst expectations of 38.5 million to 42 million, after the Iran war prompted a sharp pullback in bookings to nearby destinations including Turkey, Cyprus and Egypt.
Pub operator Marston’s reported a 7.9% rise in half-year underlying pretax profit, attributing the gain to cost control and efficiency measures, and maintained its full-year outlook.
In real estate, Picton Property said LondonMetric and Schroder Real Estate Investment Trust had agreed terms on a non-binding 403 million all-share takeover offer.
Wizz Air projected breakeven to slightly positive earnings for fiscal 2026, while warning of a challenging operating environment amid ongoing Middle East conflict.
Greggs reported 3.3% like-for-like sales growth in its latest 10-week period, helped by new menu items, and kept its full-year outlook unchanged.
Imperial Brands cautioned that the Iran war could hurt input costs and consumer demand if the conflict persists, even as it reiterated its full-year outlook. The company’s first-half adjusted operating profit was 1.64 billion, narrowly missing expectations.
Markets reacted to a combination of escalating rhetoric and concrete corporate readouts that underscore how geopolitical shocks can influence travel demand, consumer spending and input costs. The mix of weaker risk appetite and firm warnings from some companies underpinned the regional equity pullback and the pound’s decline.