Oil's 13% week: London's five-day slide and Friday's reprieve

Brent crude rose roughly 13% this week, touching a four-month high of $109.97 before easing back. That single number explains almost everything that happened to London equities between Monday and Friday. The FTSE 100 fell in five consecutive sessions, sliding from the previous Friday's close of 10,831.09 to 10,608.92 by Thursday night — 222 points, or 2.1% — leaving it on course for its steepest weekly fall in months.

Every one of the five day-ahead notes we published this week led with oil, and the sentiment we logged each morning tells the story on its own: Cautious on Monday, Tuesday and Wednesday, Risk-off on Thursday as Iran's Revolutionary Guard claimed strikes on shipping in the Strait of Hormuz, then back to Cautious on Friday. One sentiment downgrade, one recovery, and an index that never once closed higher until the final session.

The turn, when it came, arrived from two directions at once. Crude retreated on reports of a push for a Strait of Hormuz arrangement, and UK GDP grew 0.4% month-on-month in July against a consensus of no growth at all — the fastest annual rate, at 1.6%, since February 2025. The FTSE 100 was up 0.45% at 10,656.78 by mid-morning on Friday, snapping the losing run. Even so, the index ended the week below where it began it.

How the week unfolded

Monday's note opened with Brent near $97 and a warning that London was walking into a session shaped by what had happened while it was shut — a hot US August payrolls print of 162,000 against a forecast 53,000, which had knocked Wall Street lower on the Friday and revived Federal Reserve rate-rise bets. With US markets closed for Labor Day, volumes were thin. The 10-year gilt yield sat just below 5.2%, already close to its highest in almost two decades.

By Tuesday the oil story had hardened into the week's spine. Brent pushed toward $98, a six-week high, after the US and Iran traded strikes over the weekend. Domestic data was quietly deteriorating underneath: the British Retail Consortium reported August retail sales growth at a four-month low, up an annual 0.7% against 1.3% in July, while Barclays put consumer confidence at 26%, down from a 21-month high of 30%. The 10-year gilt stood at 5.16%, the 30-year at 5.79%. This was the note where we flagged the three catalysts that would define the rest of the week: the European Central Bank on Thursday, US inflation on Friday, and the Bank of England on 17 September.

Wednesday brought the escalation that broke the index. Houthi drone and missile attacks on Saudi Aramco's Jazan refinery and other southern Saudi energy sites pushed Brent to around $99 on a fourth straight day of gains, and the FTSE 100 closed down 1.31% at 10,670.06 — its lowest close in six weeks. Thursday was worse, and it was the one session we marked Risk-off: Brent reached about $101, nearly 30% above its early-August lows, and the index closed 0.6% lower at 10,608.92, a fifth consecutive fall.

Thursday also produced the week's most striking number outside the oil market. Britain sold 30-year debt at a yield of 5.8168%, the highest at any gilt sale since the Debt Management Office was established in 1998. The oil shock had travelled directly into the government's cost of borrowing, and by Friday the 10-year yield was near 5.4%, close to a 19-year high. For a market that spent August worrying about the 28 October Budget, this was the week the fiscal question stopped being abstract.

Both catalysts we flagged early resolved close to the way our notes implied. The ECB raised its three key policy rates by 25 basis points on Thursday, taking the deposit rate to 2.50% — the second rise since the Iran conflict began — and Christine Lagarde described the decision as unanimous and "a no brainer", with the accompanying statement warning that inflation is set to remain well above target for an extended period. Our Friday note said economists expected US August CPI at an annual 3.4%; it printed at exactly 3.4%, unchanged from July, with core inflation easing to 2.4% and petrol up 3.9% on the month, accounting for more than a third of the monthly increase. The consensus was right on the headline, and the detail was more hawkish than the headline suggested.

The names that moved it

The energy majors carried the week, and we named them repeatedly because they were the only reliable ballast London had. BP appeared in four of the five notes and Shell in three; on Thursday, the worst session of the week, both held up better than the wider market as they tracked the crude rally. The miners did similar work from a different direction, with Antofagasta and Glencore each firmer by about 1.5% on Wednesday as copper held near record levels.

Glencore was the week's most-mentioned single name after the oil majors, appearing in four notes. Its corporate news came on Tuesday, when Rio Tinto agreed to buy the Aurukun bauxite project in Queensland from the joint venture Glencore runs with Mitsubishi, replacing reserves as Rio's older Gove mine winds down. Terms were not disclosed and the deal still requires Queensland regulatory approval.

The strongest corporate result of the week belonged to Computacenter, which rose more than 4% to around 5,860p on Wednesday after record first-half figures. Adjusted pre-tax profit climbed 87% to £152.4m on revenue up 71.6% to £6.85bn, driven by AI and digital infrastructure demand in North America, and the group lifted full-year guidance to at least £380m against an analyst consensus of £340.9m going into the update. In a week when the index fell every day, it was the clearest evidence that the AI capital-spending cycle is still landing on UK-listed income statements.

Standard Life set the tone on Monday with first-half adjusted operating profit up 25% to £563m, beating the top of the estimate range at £541m, alongside a 28.05p interim dividend and confirmation that its £2bn acquisition of Aegon UK's pension business remains on track for year-end. The statutory loss widened as hedging costs offset the operating gain — a reminder that the headline and the accounts were telling different stories.

Elsewhere, HSBC began searching for a chief financial officer after Pam Kaur said she would step down in 2027, staying on as adviser to chief executive Georges Elhedery. Genus reported higher full-year profit and a £60m buyback but fell on a revenue miss, and Eleco agreed a £207.6m take-private with Accel-KKR. On the downside, Tuesday's session saw Haleon off 2.2% and Fresnillo down 2.1%, while recruiters PageGroup and Hays fell 4.2% and 3.9% — this despite a KPMG and REC survey showing permanent placements rising for the first time since September 2022. Admiral was among the few risers, up 1.7%. The full spread of the week's movers is on the screener.

What to watch next week

The Bank of England announces its rate decision on Thursday 17 September. We flagged it in two separate notes this week, and it now arrives with UK inflation at 2.9% in July — already above target before the oil spike — and with 30-year borrowing costs at their highest at any auction since 1998.

The Federal Reserve meets on 15-16 September, with policymakers already in their pre-meeting quiet period and this week's 3.4% CPI print on the table. Beyond that, the Budget on 28 October remains the fixed point the gilt market is trading against.