UK Inflation Slip Boosts FTSE 100 and Strengthens Euro Against Pound

The United Kingdom’s consumer price index for June 2026 fell to 2.6 % year‑on‑year, down from 2.8 % in May and below the 2.7 % market forecast. The softer reading weakened the case for further Bank of England rate hikes and revived expectations that the central bank could pause or cut rates later in the year.

London’s FTSE 100 responded by climbing about 1.2 % to roughly 10,700 points, with the FTSE 250 up 0.7 % and the AIM all‑share index also higher. The rise was helped by gains in mining and energy stocks, while the pound weakened against the euro, which moved to around 0.8525 GBP. Euro‑dollar traders saw the euro hold above $1.14.

Analysts noted that the inflation data suggested the impact of the Israel‑Iran war on UK consumer prices was limited, even as oil prices rose on renewed U.S.–Iran tensions. European markets edged lower overall as investors awaited the European Central Bank’s policy decision and upcoming U.S. technology earnings.