FTSE 100 Holds Steady as Stagflation Risks Linger

index Update: The FTSE 100 index, a key benchmark index for the London Stock Exchange, was trading rose around 0.20% on 11 May 2026. 

Macro Update: The UK economy is currently navigating a period of stagnant growth and rising Inflation, which recently hit 3.3%. While the services sector remains resilient, Manufacturing and construction are struggling with high energy costs and borrowing rates. Consequently, Unemployment is ticking upward as the Bank of England maintains high interest rates. 

Top Market Movers: Among top gainers on FTSE 100 index, Airtel Africa PLC (LSE: AAF) witnessed a rise of 11.88% followed by International Consolidated Airlines Group (LSE: IAG) witnessed a rise of 5.79%. 

Commodity Update: The U.S. dollar strengthened against major currencies in early Asian trade on Monday after stronger-than-expected U.S. jobs data reinforced expectations of economic resilience. Safe-haven Demand also increased as the fragile U.S.-Iran ceasefire remained under pressure. Gold declined 0.81% to USD 4,692.50, while silver gained 0.83% to USD 81.53 and copper rose 0.52% to USD 13,634.00. Brent Crude oil surged 3.10% to USD 104.43 after U.S. President Donald Trump described Iran’s response to a U.S. peace proposal as “totally unacceptable,” keeping geopolitical tensions elevated. 

Our Stance: The government and Bank of England maintain an "active hold" stance, keeping interest rates at 3.75%. The priority is stabilizing 3.3% inflation amid Middle East energy shocks while protecting a fragile 1.1% growth forecast and managing rising unemployment. 

FTSE 100: The FTSE 100 Index is trading near 10,248.50 and remains slightly below its 50-day SMA around 10,343.92, indicating a mildly neutral near-term structure. Price action reflects consolidation after the recent rebound attempt, with the index moving within a broad trading range over the past few weeks. The 14-day RSI near 44.85 remains below the neutral 50 level, suggesting momentum is stabilizing but still slightly subdued. Immediate support is placed around 10,100–9,950, while resistance is seen near 10,450–10,650. A sustained move beyond these levels could influence the index’s near-term directional trend.