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The FTSE 100 ended higher on Monday as former Greater Manchester Mayor Andy Burnham closed in on the UK premiership after Prime Minister Keir Starmer said he will step down. The FTSE 100 closed up 74.58 points, 0.7%, at 10,437.85. The FTSE 250 ended down 3.72 points at 23,197.01, while the AIM All-Share fell 1.56 points, 0.2%, to 794.27. The Cboe UK 100 ended up 0.8% at 1,036.75, the Cboe UK 250 was down 0.1% at 19,819.38, and the Cboe Small Companies was down 0.9% at 18,277.80. Starmer announced he was quitting following months of pressure, with Andy Burnham, who won last week’s Makerfield by-election, the frontrunner to become the country’s seventh prime minister in a decade. A clearly emotional Starmer conceded he had lost the support of his Labour party MPs just two years after winning a landslide victory in the 2024 general election. Starmer said he had asked Labour’s National Executive Committee to set out a timetable for his replacement, with nominations due to open on July 9 before closing on July 16. If Burnham is unchallenged, then he is likely to become prime minister on either July 17 or 18. One potential challenger, Wes Streeting, ruled himself out of the running, raising speculation that he may be in line to become the new chancellor. Deutsche Bank Research analyst Shreyas Gopal said who becomes the next chancellor will likely be the next focus for financial markets. Gopal believes Streeting would be seen as amongst the more market-friendly candidates. The pound traded at $1.3254 on Monday afternoon, higher from $1.3227 on Friday. Against the euro, sterling firmed to €1.1587 from €1.1532 on Friday. The yield on UK 10-year gilts ticked down to 4.81% at the time of the London equity markets close on Monday, compared to 4.84% at the same time on Friday. Elsewhere, focus remained firmly on the Middle East after Iran and the US said talks had made progress. Iran’s senior envoys left talks in Switzerland on Monday after a marathon negotiating session with the US, AFP reported. While, US President JD Vance declared that a ‘very good foundation’ had been laid for negotiations towards a final deal, with mediators also claiming progress. ‘The latest developments out of the Middle East have turned more constructive,’ said Deutsche Bank analyst Jim Reid, adding that a pickup in oil flows through the Strait of Hormuz was ‘helping to calm markets’. Brent crude for August delivery traded lower at $77.38 a barrel on Monday, down from $80.21 on Friday. The euro traded lower against the greenback, at $1.1440 on Monday against $1.1469 on Friday. Against the yen, the dollar was trading at JP¥161.41, up from JP¥161.26, on Friday. In European equity markets on Monday, the CAC 40 in Paris ended down 0.3%, while the DAX 40 in Frankfurt rose 0.6%. In New York, the Dow Jones Industrial Average was up 0.3%, the S&P 500 was 0.3% lower and the Nasdaq Composite fell 1.1%. US financial markets were closed on Friday for the Juneteenth holiday. In London, banks were prominent risers with NatWest up 4.0% and Lloyds and Barclays up 3.9% respectively. Defence manufacturer Babcock International fell 5.9% after failing to raise guidance alongside full-year results. The earnings were clouded by a previously announced £140.0 million charge related to the Type 31 frigate programme. Russ Mould, investment director at AJ Bell said: ‘Various governments have pledged to boost defence spending which has led certain investors to believe the earnings pipeline for defence contractors is vast, and there is now an element of disappointment.’ David Perry, analyst at JPMorgan, also flagged a possible near-term impact from the change in prime minister. ‘In the short term, we think that a change in PM could delay some contract awards,’ he said. However, Perry thinks this is only a matter of timing and continues to believe that Babcock could win ‘numerous international contracts in this financial year, which could bring upside to our medium-term estimates.’ On the FTSE 250, easyJet rose 2.8% after stating it had rejected three takeover proposals from Castlelake, the latest of which valued the Luton, Bedfordshire airline at around £4.74 billion. The airline called it an ‘opportunistic attempt to acquire easyJet on the cheap’. Minneapolis-based asset manager Castlelake said it made a first cash bid for the budget airline of 560 pence per share on June 12. A second tilt of 600p per share was made on June 17, followed by a third of 625p per share last Saturday. Ocado fell 5.9% after Sky News reported that the Hatfield, Hertfordshire-based grocer and warehouse technology firm is preparing to appoint a successor to Tim Steiner, its chief executive. In a statement, Ocado said CEO Steiner and the board ‘continually engage in long-term succession planning and regularly engage with potential candidates.’ IP Group climbed 0.5% after Railways Pension Trustee Co said it made a takeover approach worth 69.7p per share. Railpen, which holds a 18.4% stake in the London-based investor in the science and technology sector, said IP has had a challenging experience as a listed company and would be best served in the private markets. Gold traded at $4,184.04 an ounce on Monday, up from $4,152.32 on Friday. The biggest risers on the FTSE 100 were NatWest, up 25.20p at 663.00p, Barclays, up 19.55p at 516.00p, Lloyds Banking Group, up 4.10p at 109.20p, Whitbread, up 81.00p at 2,462.00p and Marks & Spencer, up 10.80p at 358.70p. The biggest fallers on the FTSE 100 were Babcock International, down 61.60p at 984.40p, JD Sports Fashion, down 2.68p at 82.66p, Burberry, down 32.00p at 1,102.50p, London Stock Exchange Group, down 182.00p at 8,278.00p and Relx, down 49.00p at 2,328.00p. Tuesday’s global economic calendar has a slew of composite PMI readings including the UK at 0930 BST and the Richmond Fed manufacturing index. Tuesday’s local corporate calendar has full year results from Utility Warehouse owner Telecom Plus and structural steel maker Severfield. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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