FTSE 100 Rises 0.25% as UK House Prices Rebound 0.2% in June; NATO Summit Begins

The FTSE 100 gained 0.25% Tuesday, recovering from Monday’s 0.3% decline. Fresh housing data showed UK house prices rose 0.2% in June, reversing May’s dip. Investors also tracked the NATO summit opening in Ankara. Shell led gainers after lifting its second-quarter production guidance.

FTSE 100 Recovers as European Markets Diverge

The FTSE 100 climbed 0.25% Tuesday, rebounding after Monday’s 0.3% loss. Germany’s DAX slipped 0.22% over the same session, while France’s CAC 40 advanced 0.58%. Sterling edged 0.07% lower against the dollar, trading at 1.3379.

This divergence across European indices reflects mixed investor sentiment heading into the NATO summit. The FTSE 100 (^FTSE) had opened up 47.09 points, or 0.4%, at 10,697.75 earlier in the session. Oil and gas shares provided much of the early lift, offsetting broader caution elsewhere in Europe.

UK House Prices Return to Growth in June

The Lloyds House Price Index recorded a 0.2% monthly increase in June, beating the FXStreet consensus of 0.1%. Average home prices rose to £299,330 from £298,812 in May. This reversed May’s 0.2% monthly decline, marking the first gain in four months.

📣 MARKET IMPACT
UK house prices edge up in June as borrowing costs start to ease#forex https://t.co/nkAz0HA8cx

— Forex Factory (@ForexFactory) July 7, 2026

Regional performance varied sharply across the UK:

• Northern Ireland led with 7.4% annual growth
• London recorded a 1.1% year-on-year decline
• Annual UK house price growth edged up to 0.6% from 0.5%

Lower mortgage rates helped support buyers despite ongoing affordability pressures across southern England.

Shell Leads FTSE 100 Gainers on Upgraded Guidance

Shell (SHEL) topped the FTSE 100 after raising its second-quarter integrated gas production guidance. The company now expects output of 610,000 to 650,000 barrels of oil equivalent per day. Gas trading results are expected to run significantly higher than the first quarter.

This upgrade comes despite disruption to Qatar operations following earlier missile attacks this year. Shell also agreed to sell its South African fuel supply business to Abu Dhabi National Oil Company in a $1 billion deal. That transaction is expected to close in 2027, adding a longer-term catalyst beyond this quarter’s results.

NATO Summit Opens in Ankara Amid Market Attention

NATO leaders gathered in Ankara on July 7 and 8, 2026, marking the alliance’s 36th summit. Secretary General Mark Rutte outlined three priorities: raising defense investment, strengthening industrial production, and continued support for Ukraine. European allies and Canada increased defense spending by $139 billion in 2025 alone.

$250 billion EXTRA spent by Europeans and Canadians in 2025 and 2026!
NATO Secretary General @SecGenNATO Rutte says the extra $250 billion spent by Europeans and Canadians in 2025 and 2026 shows the scale of the transformation — but also the limits of how fast armies can recruit,… pic.twitter.com/CIPajIK4d9

— euDebates.tv (@eudebates) July 7, 2026

Markets are watching closely given ongoing Middle East tensions and their effect on oil prices and inflation expectations. A draft declaration reportedly includes €70 billion in further Ukraine support, though some allies remain divided on specific commitments. Investors view summit outcomes as a factor for defense-linked equities and broader risk sentiment this week.

Bank of England Holds Rates Amid Inflation Risk

The Bank of England has held its base rate at 3.75% since the start of 2026, taking a cautious approach to inflation. The average two-year fixed mortgage rate stood at 5.53% as of June 30, up from 4.83% in February. This increase followed Middle East-related energy price pressure earlier in the year.

Mortgage rates are unlikely to fall significantly in the near term under these conditions. That backdrop makes June’s housing rebound notable, since it occurred despite tighter borrowing costs. Savills still forecasts a 2% price decline for 2026 overall, citing ongoing affordability constraints in the least affordable regions.

Final Thoughts

The FTSE 100’s 0.25% gain reflects cautious optimism, supported by Shell’s upgraded guidance and a modest housing market rebound. NATO’s Ankara summit adds a geopolitical dimension investors will watch closely this week. With the Bank of England holding rates steady, UK markets face a delicate balance between recovery signals and persistent inflation risk.

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