Britain’s shares experienced a modest increase on Friday following remarks from U.S. President Donald Trump regarding the potential for a forthcoming peace agreement with Iran, as investors also evaluated significant economic data.

The blue-chip FTSE 100 index rose 1.1% to 10,414.02 points by 1059, while the midcap FTSE 250 climbed 1.5%. Both indexes were poised for weekly gains.

• The deal, if confirmed, has the potential to bring an end to the three-month-long conflict, which has resulted in a significant increase in oil prices following Iran’s blockade of the Strait of Hormuz, a crucial channel for global energy supply.
• Most sub-indexes were in the green, except for energy, which fell 3.6% after oil prices slipped more than 4% following the news.
• Homebuilders experienced notable gains, with Vistry Group rising by 6.6%, while both Bellway and Persimmon increased by 4% each.
• The travel and leisure sub-index, which includes oil price-sensitive airlines, also advanced 3.6%. British Airways owner IAG and budget carrier Wizz Air Holdings were among the top gainers.
• On the data front, Britain’s economy contracted 0.1% in April, marking its first monthly decline since August 2025, according to the Office for National Statistics.
• ONS data revealed the initial unmistakable indications of the U.S.-Israeli conflict’s influence on Iran’s economic growth.
• “April’s data hints at what is to come, a summer of sluggishness which could edge into a technical recession as global conflict collides with domestic political uncertainty,” said Danni Hewson.
• Separately, the British public’s expectations for inflation in the long term increased to an unprecedented level last month, as indicated by the Bank of England’s quarterly inflation attitudes survey released on Friday.