UK Stocks Slip as Middle East Conflict Pushes Energy Costs

London stocks opened June lower on Monday as the Middle East conflict pushed energy costs higher. By 10:17 GMT the FTSE 100 was down 0.16% and the FTSE 250 was down 0.11%. Both indexes had ended May with back-to-back monthly gains.

EasyJet shares rose nearly 10% after US investor Castlelake indicated it was considering a potential takeover offer. Bluefield Solar Income Fund jumped 15.9% after power group Drax agreed to buy the renewable investment company for about £561 million; Drax shares gained around 1.8%. Both were among the top performers on the FTSE 250.

Energy stocks advanced as oil prices climbed following an exchange of strikes involving Iran and the United States and Israel’s movement of troops into Lebanon amid fighting with Hezbollah. Major oil firms BP and Shell each rose about 1%.

A survey of British manufacturers showed firms increased selling prices at the fastest rate since June 2022, driven in part by higher input costs and supply chain disruption linked to the Iran-related conflict. The Bank of England has left interest rates unchanged and is monitoring whether rising energy and input costs spread through the economy.

ME Group International fell about 27% to its lowest level in over three years after the company cut its full-year 2026 profit-before-tax forecast, saying changes in consumer spending tied to the Middle East situation reduced April revenue. Money transfer company Wise dropped roughly 13% after Belgian prosecutors opened an inquiry into about €500 million of suspicious transactions.

Takeover interest in specific companies provided pockets of support on the mid-cap index while other sectors posted losses. Market participants said they will watch further developments in the region and upcoming economic data for signs of how long cost pressures may persist and whether they affect policy decisions.