FTSE 100

Key insight

The FTSE 100's outperformance vs European peers is being driven by a rare confluence of tailwinds: softer inflation boosting BoE rate-cut expectations, oil above $87 benefiting Shell/BP, and a sector rotation away from US tech into value — but the index is now consolidating at a 4-month high and needs fresh catalysts to break decisively higher.

The FTSE 100 is consolidating just below the 4-month high of 10,717 reached on July 22, underpinned by cooler-than-expected UK CPI at 2.6% and a commodity-driven rally in energy and precious metals miners.

Main risk

US-Iran conflict escalation and Houthi naval threats

A further escalation causing a Strait of Hormuz supply disruption could spike Brent above $100, flipping the commodity tailwind into a stagflation headwind and triggering a sharp BoE policy reassessment.