The FTSE 100 was expected to open higher as investors cautiously welcomed signs of possible progress in Middle East peace negotiations. Optimism remained fragile amid renewed tensions over Iran’s uranium stockpiles, which pushed energy prices higher. Brent crude rose as fears grew that negotiations could stall, reigniting concerns about inflation and global energy costs. The timing was sensitive for the UK economy because retail sales volumes fell 1.3% in April after a 0.6% rise in March, with downward revisions to earlier months. Fuel sales declined sharply as motorists cut journeys and conserved fuel after unusually strong buying in March. Consumer confidence improved only marginally in May and stayed subdued, reinforcing household caution. Analysts warned of a fragile balance between softer demand and geopolitical risks that could keep energy prices elevated, complicating the outlook for future policy.
"The FTSE 100 looked set to open higher on Friday as investors cautiously welcomed signs of possible progress in Middle East peace negotiations, despite mounting concerns over Britain's weakening consumer economy and renewed rises in oil prices."
"Official figures showed UK retail sales volumes fell by 1.3pc in April after a modest 0.6pc rise in March, in line with economists' expectations. The decline was compounded by downward revisions to both February and March figures, suggesting consumer spending conditions have been weaker than previously thought."
"Brent Crude climbed amid fears that negotiations could stall, reigniting concerns over inflation and global energy costs. The renewed rise in oil prices comes at a sensitive moment for the British economy, with fresh data pointing to continued pressure on consumers and retailers."
"Fuel sales were among the sharpest drags on activity, with some retailers reporting motorists were cutting back on journeys and attempting to conserve fuel amid ongoing cost pressures. The weakness followed unusually strong fuel sales in March when drivers reportedly filled up ahead of anticipated price rises."
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