British equities recorded a modest advance on Tuesday after reports emerged that U.S. President Donald Trump signalled a willingness to conclude military operations against Iran even if the Strait of Hormuz remained largely blocked. The move coincided with a firmer pound and mixed trading across other major European markets, while final GDP figures confirmed subdued growth in the UK during the fourth quarter of 2025.
At 07:25 GMT the FTSE 100 had climbed 0.2%. The British pound gained 0.1% against the dollar to trade at 1.3202 GBP/USD. On the continent, Germany's DAX rose 0.1% and France's CAC 40 eased 0.2%.
Report on US posture toward Iran
Late on Monday a U.S. media outlet reported that the president had told senior officials he was open to wrapping up operations targeting Iran even if the Strait of Hormuz were not fully reopened. The report said the administration concluded that a campaign aimed at restoring shipping access through the Hormuz corridor would probably prolong military action beyond the four-to-six-week window the White House preferred. Officials cited in the report said the focus had shifted toward meeting core objectives such as degrading Iran's naval strength and curbing its missile stockpile, and that the administration was leaning toward scaling back hostilities once those aims had been achieved.
UK GDP and internal demand
Final GDP data for the fourth quarter of 2025 showed the UK economy grew 0.1% quarter-on-quarter, matching the prior estimate. The detailed breakdown pointed to a divergence between public and private activity - public sector output increased while private sector activity fell during the period.
Consumer spending rose by a modest 0.1% quarter-on-quarter, a downward revision from an initial estimate of 0.2%. Business investment contracted by 2.5% quarter-on-quarter, slightly less negative than the earlier reading of -2.7%. Net trade subtracted 0.5 percentage points from quarterly GDP growth. Rounding adjustments lifted the headline annual growth figure for 2025 from 1.3% to 1.4%.
Company results and updates
Several London-listed companies disclosed results and guidance updates on Tuesday across industries from computing hardware to food packaging and infrastructure.
- Raspberry Pi Holdings PLC (LON:RPI) reported a 25% rise in full-year adjusted EBITDA to $46.4 million for the year ended Dec. 31, 2025, up from $37.2 million a year earlier. Revenue increased 25% to $323.2 million from $259.5 million. The company said demand remained firm despite substantial price increases driven by higher memory costs, and Jefferies raised its 2026 revenue forecast for the company by 42%.
- A.G. Barr PLC (LON:BAG) said adjusted pre-tax profit for the year ended Jan. 31 rose 12.5% to £65.8 million, marginally ahead of the £65.4 million analysts had expected, per LSEG data. Revenue climbed 4% to £437.3 million and adjusted earnings per share were reported at 44.24 pence. The maker of Irn-Bru noted that its expansion into energy and health drinks helped offset a modest increase in costs associated with the Middle East conflict.
- Severfield PLC (LON:SFR) indicated that pre-tax profit for the fiscal year ending March 2026 is expected to be in line with market expectations of £10.2 million. The structural steel fabricator also reported net debt of roughly £28 million, well below the company-compiled consensus of £48.5 million, a position the company attributed to disciplined cash management.
- Future PLC (LON:FUTR) cut its full-year guidance by 15% to 20%, citing an ongoing shift away from audience traffic driven by Google. The Bath-based media group said direct advertising revenue is expected to grow year-on-year, Go.Compare and its B2B division saw revenue declines moderate in the first half, and the company expects growth in the second half.
- Hilton Food Group Plc (LON:HFG) posted full-year fiscal 2025 adjusted profit before tax of £73 million, in line with prior guidance. Management reiterated a fiscal 2026 adjusted PBT guidance range of £60-65 million and launched a strategic review intended to strengthen its core red meat business while pursuing efficiency and margin improvements.
- 3I Infrastructure PLC (LON:3IN) provided a performance update covering Oct. 1, 2025 to March 30, 2026, stating it remains on track to meet its return target for the full year. The company said its portfolio is expected to deliver an 8-10% return, noting particularly strong performance from FLAG as demand for subsea connectivity continued to be supported by AI workloads.
What this means for markets
The tone across the trading session was cautious but slightly positive for the UK market. Sterling's small gain and the FTSE 100 rise reflected investor responsiveness to reports that U.S. political leadership may be moving toward a more limited operational end-state in the Iran engagement. Separately, the GDP print confirmed a slowing private sector and weak investment that will likely continue to inform corporate performance and investor expectations going into the coming quarters.
Outlook
Market participants watching shipping routes and energy-sensitive sectors will be attentive to further developments regarding the Strait of Hormuz and any official policy shifts. Corporate earnings and guidance updates from the listed companies above will remain a near-term focus for investors parsing the implications of subdued consumer spending and weaker business investment for UK growth.