London midday: FTSE ticks up, gilt yields ease as Streeting throws weight behind Burnham

(Sharecast News) - London stocks had ticked higher by midday on Monday, while gilt yields eased as investors welcomed the prospect of an unopposed leadership contest after Wes Streeting threw his weight behind Andy Burnham following the resignation of Prime Minister Keir Starmer.

The FTSE 100 was 0.3% higher at 10,393.55, while sterling was 0.1% firmer against the dollar at 1.3241. The yield on the 10-year gilt was three basis points lower at 4.82% and the yield on the 30-year gilt was down four basis points at 5.51%.

In a brief statement outside 10 Downing Street, Starmer said: "The question my party is asking now is whether I am best placed to lead us into the next general election.

"I have heard the answer of my parliamentary party to that question, and I accept that answer with good grace. Every decision I've taken has been about putting the country I love first. That is why I will resign as leader of the Labour party."

Starmer said he would ask the Labour Party's national executive committee to set out a succession timetable, with nominations opening on July 9 and completed by the summer recess. In the case of a contest, this would ensure a new leader is in place before parliament returns in September, he added. The parliamentary recess is due to start on July 16.

Former health minister Wes Streeting confirmed that he would not be running against Burnham, saying instead that he was backing the former Greater Manchester Mayor, who announced earlier his intention to stand for PM.

Meanwhile, Brent crude was 1.6% lower at $79.28 a barrel after Qatar and Pakistan said the US and Iran have agreed on a roadmap to reach a final deal in 60 days. In a joint statement following talks between the two in Switzerland, the mediators said the US and Iran would continue technical talks throughout the week and establish a high-level committee to oversee the mediation process.

They also said that negotiators from the US and Iran have agreed to establish a "de-confliction cell" for Lebanon to "ensure the adherence of the termination of military operations" there as per the memorandum of understanding.

Although oil prices were weaker, they were already coming off the lows hit immediately after news of the roadmap. Despite the progress, Tickmill Group's Patrick Munnelly was quick to point out that "the situation is not clean", noting that US President Donald Trump has also threatened renewed military action, Tehran has hinted at re-closing the Strait, and shipping activity remains difficult to read.

"The latest reports suggest traffic has slowed, and Iran may be considering a new oversight mechanism for the waterway, possibly including fees for shipping," he said. "That means the market is not pricing peace; it is pricing a lower probability of the worst-case scenario.

"The distinction matters. A 60-day roadmap is encouraging, especially with Oman and Pakistan reportedly helping create a committee to steer negotiations. But a roadmap is not a final deal, and the operational status of Hormuz remains murky."

Munnelly said that oil prices falling below $80 a barrel is a relief for inflation and central banks, "but the risk premium cannot disappear entirely while shipping flows, security arrangements and sanctions negotiations remain unresolved".

In equity markets, Babcock tumbled as it backed its FY27 expectations and posted a rise in annual revenue but a dip in underlying operating profit as it took a �140m hit from a charge on the Type 31 contract with the Royal Navy.

Ocado was also under the cosh on a report the board is sounding out candidates to replace its co-founder CEO Tim Steiner following a weak share price performance. In a very brief statement, Ocado said its chief executive and the board "continually engage in long-term succession planning and regularly engage with potential candidates".

Budget airline easyJet flew higher after it rejected a third takeover proposal from private equity firm Castlelake at 625p per share. This followed previous proposals at 560p and 600p.