FTSE 100 Live: Stocks open flat as oil falls below $90; US-Iran peace talks ‘progress’

Welcome back to the City AM FTSE 100 liveblog.

The UK’s blue-chip index is in a tug of war this morning, as reports that negotiations over the Iran war could be making ground have failed to meaningfully boost investors’ spirits.

Oil prices continued to fall on Tuesday evening. Brent crude – the international benchmark – fell by about three per cent to around $89.5 per barrel after Pakistan’s army chief said significant progress was being made towards a US-Iran peace deal.

Reports that Iran and Oman are nearing a deal to secure an “interim” reopening of the Strait of Hormuz are a cause of further optimism for global investors.

Dan Coatsworth, AJ Bell’s head of markets, said: “Despite the pressure lower oil prices put on the shares of index heavyweights BP and Shell, the FTSE 100 managed to make some progress [on Tuesday]. It was supported by gains in the retail, aviation and housebuilding sectors.

“These areas have typically been beneficiaries when hopes of a resolution to the Iran conflict emerge, given the implications for inflation and borrowing costs if shipping routes through the Strait of Hormuz are unblocked.”

This morning, energy regulator Ofgem hiked its cap on household bills by four per cent to an annual bill of £1,723, putting fresh pressure on Andy Burnham’s cost-of-living agenda.

The new price cap, which will cover the three months from October, comes as the Iran war and its global impact on energy prices rumbles on. Economists said last quarter’s price cap rise contributed to higher UK inflation.

Across the Atlantic, the emerging trade war between the US and Canada was taken up a notch overnight. Canada’s finance minister unveiled a $20bn package of retaliatory tariffs against its neighbour after President Trump stepped up his rhetorical attacks on his northern neighbour.

We’ll be bringing you the latest market updates and analysis.

This morning’s top stories:

• State pension set to pile pain on next generation of taxpayers, Healey warned
• Economists urge Bank of England to halt bond sales as borrowing costs climb
• Robert Jenrick pledges reform for small businesses
• Top FTSE headhunter rescued by rival after plunging into administration
• The Danish retailer plotting to outsmart ‘unsentimental’ Modella Capital