London stocks were mixed at midday on Monday, with the FTSE 100 trading broadly unchanged as falling oil prices weighed on heavyweight energy companies, while gains across consumer, defence and industrial shares supported the wider market ahead of this week’s Bank of England interest rate decision.
At 12.15 pm GMT, the FTSE 100 traded at 10,724.58, down about 0.05%, while the FTSE 250 advanced 0.66% to 24,615.56, reflecting stronger demand for mid-cap companies.
Brent crude fell more than 4% to around $108 a barrel after diplomatic talks between Iran and Qatar raised hopes of progress toward ending the US-Iran conflict.
The decline in energy prices weighed on oil producers, with Ithaca Energy falling 2.2% and BP declining 1.5%, contributing to a 1.2% drop across the energy sector.
Pharmaceutical stocks also retreated, falling approximately 0.6% following Friday’s rally of more than 5%, their strongest single-day advance in around 13 months.
However, lower oil prices provided support for consumer-facing companies, with investors assessing the potential benefits of reduced transport costs, easing inflationary pressures and improved household spending power.
Aerospace and defence stocks gained 0.8%, while personal care, grocery and related consumer sectors advanced between 0.7% and 0.8%.
The stronger performance among these sectors helped offset weakness in the FTSE 100’s energy and healthcare heavyweights.
Investors are also preparing for Thursday’s Bank of England interest rate decision, with economists widely expecting a 25-basis-point increase as policymakers respond to persistent inflation.
UK inflation accelerated more than expected in September, adding to concerns that elevated energy costs could continue affecting consumer prices and business expenses.
Fresh manufacturing data on Monday showed that British factory output recorded its strongest growth in more than two years during October, providing further evidence of resilience in parts of the economy.
The figures strengthened expectations that the Bank of England could tighten monetary policy despite concerns about slower economic growth.
The FTSE 100 entered November following its first monthly gain in three months, outperforming the US S&P 500, which declined by almost 1% in October amid a sell-off in artificial intelligence-related stocks.
UK equities also benefited from a relatively measured reaction to Chancellor John Healey’s Autumn Budget, which introduced smaller-than-feared tax increases for banks and gambling companies while confirming funding for defence investment.
Among individual mid-cap companies, FirstGroup climbed 4.8% after agreeing to sell certain assets to the West Yorkshire Combined Authority for £109 million.
The transaction provided additional support for the FTSE 250, which outperformed London’s blue-chip index during the morning session.
The contrasting market performances highlight the impact of falling oil prices on different sectors, with energy producers facing pressure while consumer and transport-related businesses potentially benefit from lower operating costs.
Attention will now turn to the Bank of England’s interest rate announcement, further economic data and developments in Middle East diplomacy, as investors assess whether easing energy prices can support a broader recovery across UK equities.
