Oil up 8%, gilts at 2008 highs, FTSE 100 flat: London's week

Brent crude rose about 8% over the week to end near $95.23 a barrel, and the FTSE 100 closed on Friday at 10,823.71, down 7.81 points or 0.07% on the day. Between the lowest close of London's four-day week and the highest sat about 42 points — roughly 0.4%. Four sessions of Middle East escalation, a gilt market at its most stressed since 2008 and a US jobs report that beat every forecast on the street, and the blue-chip index barely registered any of it.

That flatness was arithmetic, not agreement. The same Iran shock that drove the oil price also drove the gilt market, and London's index is built so those two forces largely cancel: energy majors and miners took the upside, while the rate-sensitive half of the market — banks, housebuilders, anything discounting a long-dated cash flow — absorbed the damage. The 10-year gilt yield touched its highest level since 2008 on Wednesday before easing back to 5.16% by Friday.

Our morning notes logged the mood as Cautious on Tuesday, Risk-off on Wednesday, Mixed on Thursday and Cautious again on Friday. That is a market which stopped falling without ever deciding the danger had passed — and what changed over those four sessions was the bond market, not the news flow.

How the week unfolded

London lost Monday to the summer bank holiday and walked into Tuesday already behind events. Over the weekend the US had struck Iranian rocket launchers on Larak Island in the Strait of Hormuz, and Iran's Revolutionary Guard had retaliated against American bases in Jordan. Our Tuesday note framed the risk as a bond story rather than an equity one, and that is how it played out: Brent pushed above $91, the 10-year gilt yield rose to 5.21% — then its highest since June 2008 — and the 30-year reached 5.86%. Sterling fell alongside gilts rather than rallying on the higher yields, which told you the move was being read as fiscal stress rather than tightening into strength.

Wednesday was the low point and the only session we marked Risk-off. Fresh US strikes on the Revolutionary Guards overnight took Brent to $95.35 from $92.48 the evening before, and we called the open around 0.4% lower. Gilt yields pushed higher again to an 18-year peak. Thursday broke the run: yields fell about 9.5 basis points, the FTSE 100 rebounded 0.7% to close at 10,831.52, and precious-metals miners were the day's best-performing sector, up 3.4%. The FTSE 250, a better read on domestic rate expectations than the blue-chip index, had bottomed near a one-month low on Thursday before recovering to finish Friday at 24,544.11, up 47.98 points or 0.2%.

The catalysts we flagged mostly resolved, though not always the way the notes implied. US non-farm payrolls, which both our Thursday and Friday notes named as the week's decisive release, landed at 1.30pm on Friday with 162,000 jobs added against a consensus of 53,000, the unemployment rate steady at 4.1%, and June and July revised up by a combined 55,000. That was a beat on a scale almost nobody had positioned for, and London took it calmly: the index ended the day fractionally lower, having traded between 10,791.43 and 10,843.12.

The FTSE Russell quarterly review, flagged in both our Tuesday and Wednesday notes, was confirmed after Wednesday's close using Tuesday's prices: easyJet and Ithaca Energy join the FTSE 100, with Entain and Persimmon relegated to the FTSE 250. The changes are implemented at the close on Friday 18 September and take effect from the start of trading on Monday 21 September.

The clear miss was the UK construction PMI our Thursday note put on the calendar. It printed at 44.3 against expectations of 45.9, a twentieth consecutive month below the 50 line, with residential work the weakest component at 37.6. Our note had framed it as a modest further easing; it was considerably worse than that, and it sat awkwardly beside a manufacturing PMI that had merely slipped to 51.7 earlier in the week. The gap between those two surveys is now the most striking thing in the UK data.

The names that moved it

BP was the most-mentioned stock in our notes this week, and for governance rather than geology. On Wednesday it confirmed Ian Tyler, the former Balfour Beatty chief executive, as permanent chairman — its third chair in under a year, following the board's removal of Albert Manifold in May over conduct and governance concerns. Senior independent director Dame Amanda Blanc, who oversaw both appointments, will not seek re-election next year. With Brent above $95 throughout, BP and Shell had the commodity backdrop working in their favour all week; whether a third chairman in twelve months draws a line under the boardroom chapter is the open question.

M&G produced the week's standout set of numbers and its most instructive share-price reaction. Adjusted operating profit rose 15% to a record £435m, the best half since its 2019 listing; the asset management arm lifted operating profit 24% to £159m; net inflows of £2.4bn took assets under management to £387bn from £355bn a year earlier; and the interim dividend was set at 6.8p. The shares still slipped, trading around 342p against a prior close of 343.1p, after earnings per share of 13.66p came in roughly 3% below the 14.12p forecast. A record half-year and a softer share price is a fair summary of what the market is currently paying for operational progress.

The miners did the heavy lifting on the upside. Fresnillo and Endeavour Mining led a precious-metals sector that gained 3.4% on Thursday, with gold pushing back above $4,400 an ounce as Treasury yields eased and the Hormuz standoff kept a safe-haven bid running. Antofagasta and Glencore were in focus on Wednesday on the industrial-metals side, where a firmer dollar and renewed growth worries cut the other way. Travel names were the mirror image: InterContinental Hotels Group sat on our watch list on Wednesday precisely because a fuel bill that rises 8% in a week lands on somebody's cost base.

Underneath the single names, the tanker data was the detail that mattered most and got the least attention. Six commodity vessels transited the Strait of Hormuz on Wednesday, against 11 on Tuesday and a ten-day average of nearly 13. Roughly a fifth of the world's seaborne oil moves through that channel, and the world's largest tanker operator now expects disruption to persist past year-end. That is the mechanism sitting behind every energy and inflation line in this week's notes.

What to watch next week

Friday 11 September, 7am: the ONS publishes its monthly GDP estimate for July, the last significant growth reading before the Bank of England meets.

Thursday 17 September, midday: the Monetary Policy Committee announces its sixth decision of 2026, with Bank Rate currently at 3.75%. Our Friday note recorded markets pricing roughly a 70% chance of a rise by November and about 80% by February — pricing set before Friday's payrolls figure and before gilt yields came off their highs.

Friday 18 September: the FTSE Russell changes are implemented at the close, effective Monday 21 September. Index-tracking flows around easyJet, Ithaca Energy, Entain and Persimmon typically concentrate into that final session.

Constituent moves into the reshuffle can be tracked through our screener.