London stocks closed sharply lower on Monday, with the FTSE 100 falling 1.07% as political unrest across several European countries, higher borrowing costs and renewed concerns over banking sector risks weighed on investor sentiment.
The decline marked a weak start to the week for UK equities following the FTSE 100’s strong performance in the previous five sessions.
Barclays fell 3.26% following a Financial Times report that the Bank of England was examining allegations concerning the bank’s treatment of risks associated with illiquid private credit loans.
The reported inquiry follows a complaint to the Prudential Regulation Authority alleging that Barclays breached regulatory requirements when classifying total return swaps linked to private credit exposures.
The allegations have not been established as regulatory breaches, but the reports raised concerns over risk management and transparency within the expanding private credit market.
Mining group South32 declined 2.49% after reporting weaker year-on-year production across several commodities during its fiscal first quarter.
Output was lower at its Brazilian alumina operations and across selected metals, including silver, lead and gold.
RBC Capital Markets highlighted weaker-than-expected performance at the company’s Cannington operation, where zinc-equivalent production reached 59,000 tonnes, approximately 18% below expectations of 73,000 tonnes.
Production at Cannington declined 27% quarter-on-quarter as temporary constraints on paste backfill availability delayed access to planned mining areas, reducing ore volumes and grades.
South32 supplemented mined ore with lower-grade stockpiles but maintained its full-year 2027 production guidance.
The company expects to provide an update on studies aimed at extending Cannington’s mine life alongside its interim results in February 2027.
GSK shares slipped 0.39% despite the pharmaceutical company reporting encouraging clinical findings for its experimental cancer treatment risvutatug rezetecan.
The antibody-drug conjugate demonstrated positive anti-tumour activity in the Embold PanTumour-101 trial involving patients with relapsed extensive-stage small cell lung cancer.
The findings provide further clinical information for GSK’s oncology development programme, although additional research will be needed to establish the treatment’s wider clinical potential.
Meanwhile, figures from property website Rightmove showed that average UK asking prices for newly listed homes increased 1% in October, following a 0.7% rise in September.
Despite the monthly increase, asking prices remained 0.1% lower than a year earlier, compared with an annual decline of 0.8% in September.
Rightmove property expert Colleen Babcock said higher mortgage rates continued to weigh on housing affordability, with sellers taking different approaches to pricing depending on their circumstances.
Some homeowners are reducing asking prices to attract buyers, while others are maintaining expectations and accepting potentially longer selling periods.
Uncertainty surrounding the forthcoming UK Budget is also influencing the housing market, as buyers and sellers assess the possible impact of fiscal measures on household finances and borrowing costs.
Investors now face a busy week of UK economic releases, beginning with labour market figures on Tuesday and inflation data on Wednesday.
Thursday will bring the Confederation of British Industry’s business optimism and industrial orders surveys, followed by consumer confidence, retail sales and preliminary S&P Global purchasing managers’ index figures on Friday.
The upcoming inflation and employment data could prove particularly important for Bank of England interest rate expectations, as policymakers assess the balance between persistent price pressures and domestic economic activity.
The FTSE 100’s decline highlights continued sensitivity to European political developments, financial sector uncertainty and changing expectations for interest rates, with investors looking to the week’s economic figures for clearer direction.
