FTSE 100 slips as Burnham becomes PM amid oil surge
The London ftse100 slipped about 0.4% on Monday as Andy Burnham prepared to become UK prime minister and Middle East tensions pushed oil higher. Energy majors gained while airlines and the wider index lagged, with investors also watching Burnham's looming Chancellor pick. European shares edged lower as the City awaited cabinet appointments and a heavy week of central-bank and earnings news.
Key Takeaways
- The FTSE 100 fell around 0.4% in early Monday trade, tracking a softer Europe.
- Andy Burnham is set to succeed Sir Keir Starmer as prime minister, with markets focused on his Chancellor choice.
- Brent crude rose about 2.2%, lifting Shell, BP and TotalEnergies while Ryanair and Lufthansa dropped.
- Segro fell after rejecting a sweetened Prologis bid, adding to blue-chip pressure.
Why is the FTSE 100 falling today?
According to Investing.com, the blue-chip FTSE 100 slipped 0.4% as the pan-European STOXX 600 eased 0.2%. Germany's DAX and Spain's IBEX also traded lower.
Investors were bracing for a European Central Bank meeting, U.S. megacap earnings and UK political leadership changes. A sharp global technology sell-off late last week also weighed on early sentiment.
City AM's live coverage had flagged that wider Middle East escalation could lift oil giants yet drag on the broader index—an early pattern that matched Monday's open.
What does Burnham becoming PM mean for stocks?
City AM reported that Sir Keir Starmer will formally resign and Andy Burnham will become prime minister and deliver his first speech. Markets have been trying to size up what a Burnham premiership means for the City.
Burnham had not yet announced cabinet posts. Briefings pointed to home secretary Shabana Mahmood as a likely Chancellor and chief whip Jonathan Reynolds as business secretary, with tech and science briefs expected in a beefed-up department.
Mahmood is seen as a respectable pick for business even though she is relatively unknown in the Square Mile, City AM noted—far from earlier chatter about an Ed Miliband chancellorship that had unsettled some investors. For more wealth and markets coverage, see BlasterPost's Net Worth & Wealth section.
How are oil and airlines moving the index?
The U.S.-Iran conflict stretched into a ninth day, Investing.com said, helping push Brent crude up 2.2%. European energy majors such as Shell, BP and TotalEnergies gained over 1% each.
Airline stocks fell broadly, with Ryanair and Lufthansa down more than 2% each. City AM also highlighted Ryanair profit pressure as jet fuel prices doubled, underscoring the squeeze on travel names when energy spikes.
Separately, warehouse landlord Segro fell about 1.5% after rejecting a sweetened offer from Prologis, a move City AM put near a £13.5bn bid value.
What else should investors watch this week?
The ECB meets Thursday and is widely expected to hold its key rate at 2.25% after a June hike, though higher oil may keep a hawkish tone—and a September hike—on the table. Wall Street names including Alphabet, Tesla and Intel are also due to report, which matters for European industrials and chip-linked suppliers.
Earlier in the week's setup, Yahoo Finance UK noted the FTSE 100 had closed 0.39% higher on Thursday when modest UK growth data offset Middle East worries. That rebound mood faded Monday as politics and oil took centre stage.