FTSE 100 today: Stocks pare gains as oil rebounds, BoE flags risks

On Wednesday, British stocks saw a slight decline as oil prices rose and the Bank of England warned of financial system risks. The FTSE 100 ended the day down 0.02%, while Germany's DAX fell 0.36% and France's CAC 40 dropped 0.60%, reversing earlier gains. The British pound strengthened, rising 0.40% against the dollar to $1.3283.

The Bank of England's Financial Policy Committee highlighted increased risks from interconnected vulnerabilities, citing the Middle East conflict, higher energy prices, rising bond yields, and exposure to artificial intelligence. Brent crude prices surpassed $100 a barrel, and gilt and U.S. Treasury yields hit their highest levels since 2008.

UK GDP grew 0.5% in the April-June quarter, exceeding forecasts of 0.4% and the 0.6% growth in the first quarter. Net trade was the primary driver of growth, with export volumes up 2.8%. Services output expanded by 0.6%, while production declined by 0.1%. Inflation in Germany reached 3.3% in September, surpassing expectations of 3.2%, according to the Federal Statistical Office.

France's preliminary inflation rate increased to 3% from 2.4%, beating forecasts of 2.8%, reported INSEE. Prime Minister Andy Burnham suggested the UK government might reconsider joining the EU as part of a broader review, stating that Brexit had caused more harm than good. Conservative deputy leader Alex Burghart refuted Labour's claim that current economic challenges could be attributed to the Brexit vote.

Markets were expected to focus on U.S. GDP and personal consumption expenditures data following the ADP private payrolls report. Iran's Revolutionary Guards spokesman, Hossein Mohebbi, indicated that military conflict in the Strait of Hormuz is ongoing and that the U.S. does not respond. Iran received a U.S. response to its offer to reopen the Hormuz Strait, and top leaders are considering it, as per government spokeswoman Fatemeh Mohajerani.

U.S. President Donald Trump claimed the war on Iran would end soon but did not provide details, reaffirming that Tehran would not acquire a nuclear weapon. Reports suggested Trump would not ease sanctions on Iran, contributing to the rise in oil prices. Iranian President Masoud Pezeshkian alleged that Washington and Israel aimed to create internal divisions after failing militarily.

Brent crude futures climbed 1.54% to $97.64 a barrel, while U.S. West Texas Intermediate prices increased 1.19% to $90.44, after earlier losses. Gold futures rose 0.86% to $4,215.75 an ounce, and spot gold gained 0.08% to $4,185.61. Healthcare company Saga reported nearly double its underlying pretax profit in the first half of 2026, leading the over-50s specialist to revise its profit and cash-flow outlook.

Fast-food chain Greggs raised its 2026 profit outlook after experiencing stronger summer sales, while proposing four manufacturing site closures and around 740 job cuts. Pinewood Technologies announced a wider H1 loss due to higher North American investment and acquisition costs, offsetting increased revenue and EBITDA, but maintained its FY26 outlook.