Investing.com — UK equities and European peers fell on Thursday while the pound weakened as uncertainty over the Middle East war persisted, with U.S. President Donald Trump saying Iranian negotiators are “begging” for a peace deal.
Earlier this week, Iran signaled it had no intention of directly negotiating with the U.S.
As of 12:31 GMT, the blue-chip index fell 1.4% and the British dropped 0.3% against the dollar to 1.3328. index in Germany dropped 1.6%, the in France fell 1.1%.
UK round up
The United Kingdom received the largest economic growth downgrade among G20 nations due to the Iran conflict, according to the Organisation of Economic Co-operation and Development on Thursday. The Paris-based policy group cut its 2026 UK growth forecast to 0.7% from a previous projection of 1.2% in its interim economic outlook. The reduction reflects the impact of disrupted energy supplies and elevated commodity prices stemming from the US-Israel war with Iran. Inflation in the UK is expected to accelerate to 4% this year, up from 3.4% in 2025, driven by higher energy costs. The rate represents the second-highest among G7 economies and remains above the Bank of England’s 2% target. The OECD expects the Bank of England to maintain its key interest rate at 3.75% before implementing a quarter-point reduction in early 2027 as inflation pressures ease. Consumer price inflation is forecast to decline to 2.6% next year.
British retailer Next PLC (LON:) said the US-Israeli war against Iran is likely to raise costs and weigh on demand, while it reported a rise in annual earnings. The company posted group profit before tax of £1.158 billion, up 14.5% from £1.011 billion a year earlier, while group sales rose 10.8% year-over-year to £7 billion. Earnings per share came in at 744.2 pence. Shares in Next jumped after the print.
FirstGroup PLC (LON:) released a pre-close trading statement, reporting that performance at both First Bus and First Rail divisions met expectations. The transport operator updated its net debt guidance for fiscal year 2026 to £135 million to £145 million, an improvement from the £140 million to £150 million range provided in December following the Tootbus acquisition.
UBS upgraded Close Brothers Group plc (F:) shares to Buy from Neutral, setting a price target of 555 pence. The financial services group’s stock price has fallen roughly 25% year-to-date, impacted by concerns over potential motor finance redress costs, a slow-to-recover loan book, declining income and profits, and higher restructuring charges.
Currys PLC (LON:) shares fell after the retailer said Chief Executive Alex Baldock plans to step down following eight years in the role to take up a new external position. The board will begin a formal recruitment process for Baldock’s successor, considering both internal and external candidates. Baldock will remain in his role during this time.