Dear reader,
So that is that. Keir Starmer, gone. A man who won the biggest Labour landslide since 1997, handed the keys to Downing Street, and then spent the next two years doing a remarkably effective impression of someone who did not want to be there. In comes Andy Burnham, twice rejected as Labour leader, who went off to Manchester to be Mayor, had an MP resign his safe seat to let him back into Parliament, and has now been handed the country without a single voter being asked.
The markets care about one thing from all of this: who becomes Chancellor. Rachel Reeves has already effectively conceded publicly that Burnham will not keep her on, and the two names being floated are Wes Streeting and Ed Miliband. Burnham is reportedly leaning toward Miliband, one of his closest allies and a former Treasury advisor under Gordon Brown. If that happens, it matters. Miliband as Chancellor means a more interventionist hand on the public finances, more green spending commitments, and a question mark over the fiscal rules Reeves has spent two years defending. Bond markets will have a view. Sterling will have a view. So should you.
And while all of that was unfolding, the government quietly confirmed something that will affect almost every reader of this newsletter. From April 2027, cash held inside a stocks and shares ISA will be subject to a 22% charge on any interest it earns. The stated intention is to stop people using investment ISAs as a backdoor cash ISA once the cash ISA limit drops to £12,000 for under-65s. The practical effect is that if you sell a position and leave the proceeds sitting in your ISA while you decide what to do next, you will now be taxed on the interest. Martin Lewis called it a blunt tool and he is right. I have long liked the idea of a British ISA as a way to channel retail money into UK equities. This is the opposite instinct: more complexity, more friction, and a nudge toward investing that will push some people out of the market entirely rather than into it.
The Week in Numbers
Away from Westminster, the market had plenty of its own drama. The FTSE 100 was lifted this week by a wave of transatlantic bid activity that sent two major names sharply higher, while beneath the surface energy stocks fell as oil slid to a three-month low on renewed optimism around a US-Iran settlement. The FTSE 250 told a more mixed story: housebuilders bounced on stronger than expected house price data, while a handful of domestic names were punished for results and strategic resets the market had not priced in. The week’s real signal was not in the index moves but in what American money is telling us about how cheap UK assets have become.
The Big Story: America is Buying Britain
Two of the week’s biggest movers had nothing to do with earnings. SEGRO received a £12.6 billion all-share approach from Prologis, the world’s largest industrial REIT, and easyJet received its fourth takeover proposal in a fortnight from US private equity firm Castlelake. Both boards rejected their respective approaches as opportunistic. Both share prices surged regardless.
The pattern is becoming difficult to ignore. US buyers with deep pockets and strong balance sheets are looking at UK-listed assets and seeing a structural discount, one created by years of geopolitical uncertainty, domestic political noise, and a prolonged period where UK equities were simply out of fashion with global allocators. Whether or not either of these specific deals completes, the message to the market is clear: at these prices, someone wants to own these businesses. That tends to matter more than the rejections.
Risers
It was takeover season on the FTSE 100 this week. easyJet (LON:EZJ) was the standout, up 22% to 583p. Castlelake made its fourth non-binding proposal at 650p, the board rejected it but granted due diligence access and extended the regulatory deadline to 5 July [3]. The market read that as the door being left ajar. With four bids and counting, few expect this to be the last word.
SEGRO (LON:SGRO) surged 19% to 880p after Prologis launched a hostile £12.6 billion all-share bid at an imp
lied 925p per share, which the board flatly rejected [3]. It lifted the whole property sector with it, Tritax Big Box up 6.7%, British Land up 5%, LondonMetric up 3% [3]. If Prologis sees value here, the market has perhaps been too harsh on UK property for too long.
3i Group (LON:III) gained 15% to 2,537p after an AGM update showed Action, its dominant portfolio asset, delivered like-for-like sales growth of 3.3% year to date, up from a concerning 2.4% in May [4]. A £750 million buyback was also put to shareholders. Prior to this week the stock had been trading at a 24% discount to NAV. Clean story, genuine operational improvement.
British American Tobacco (LON:BATS) added 10% to 4,771p on no single catalyst, helped by a Morgan Stanley double upgrade to Overweight with a 4,900p target and defensive rotation as oil fell. A near-6% yield tends to attract buyers when macro uncertainty rises.
Marks and Spencer (LON:MKS) rounded off the top five, up 8.8% to 378.60p. No fresh RNS, but grocery market share data showed M&S and Ocado topping the UK rankings, with M&S Food posting fiscal 2026 sales of £9.72 billion, up 7% [5]. Analyst consensus sits around 439.50p, roughly 15% above current levels [5].
In the FTSE 250, housebuilders had a strong week. Vistry Group (LON:VTY) and Bellway (LON:BWY) rose 10% and 9.3% respectively after ONS data showed UK house prices up 3.8% in the year to April, the strongest reading in months [6]. Vistry is down over 60% in the past year so any positive sector news hits hard on the upside. B&M European Value Retail (LON:BME) added 10.5% to 206.80p on its fiscal 2026 annual report, with revenue up 3.6% to £5.6 billion and adjusted EBITDA of £459 million [7]. Genuit Group (LON:GEN) rose 8.8% to 285.80p, recovering some of its 2026 losses after full year 2025 revenue came in at £602 million, up 7.3% [7]. Pinewood Technologies (LON:PINE) rounded things out, up 8.4% to 264.50p, a bounce from oversold levels rather than any fresh catalyst.
Fallers
The headline faller requires context. AEP Plantations (LON:AEP) appeared to collapse 90% to 156.86p but went ex-dividend on 18 June, paying a bumper 81 cent full-year dividend. Nothing to see here.
The real story was Telecom Plus (LON:TEP), down 19% to 768p and now more than halved over the past year. Full year results confirmed adjusted profit at the bottom of guidance at £132.2 million, hit by a warm winter that reduced energy consumption [8]. The bigger shock was a five-year investment plan cutting FY27 profit guidance to £80-90 million as the business commits to spending on pricing, digital tools and brand building [8]. The Utility Warehouse model looked brilliant when energy prices were spiking. A warm winter and rising competition killed that thesis. Directors have since bought shares aggressively and a £40 million buyback has been launched, which is at least something. But the market is not yet convinced.
London Stock Exchange Group (LON:LSEG) was the biggest blue-chip faller, down over 10% to 8,062p. Strong fundamentals on paper, but investors are increasingly worried that AI erodes the value of its proprietary data business, with Bloomberg and new AI models both circling [3]. That is not a question the market has finished asking. WPP (LON:WPP) slid 9% to 247.20p. Goldman Sachs initiated a sell in early June and the structural AI headwind on traditional advertising has not gone away.
Glencore (LON:GLEN) and BP (LON:BP.) fell 7.6% and 6.8% respectively as Brent crude fell to a three-month low below $76 on US-Iran optimism [3]. Energy is a macro trade right now, not a fundamental one. Those holding for the dividend are fine. Those holding for a near-term price recovery should know the thesis depends entirely on a diplomatic outcome that has surprised in both directions all year.
Babcock International (LON:BAB) fell 7% to 971p despite reporting 8% organic revenue growth and underlying operating profit up 19%, undone by a £140 million Type 31 frigate charge [6]. A further £200 million buyback was announced and Jefferies holds its 1,400p target [6]. The structural defence case, driven by rising NATO spending commitments, has not changed. This looks like investors who bought the defence re-rating and wanted a cleaner set of numbers than they got.
Raspberry Pi (LON:RPI) slipped 12% to 782.50p, profit-taking after a strong run rather than anything fundamental. Fidelity China Special Situations (LON:FCSS) fell 10.5% to 247p as China sentiment stayed weak following a Trump-Xi summit that produced plenty of handshakes and little else.
Global Signals
Oil fell to a three-month low this week on US-Iran optimism. The move is positioning, not fundamentals. Brent is being driven by diplomatic headlines rather than inventory data, which means it can reverse as fast as it moved. For FTSE investors, energy stocks are a short-term macro trade right now. If you own Shell or BP for the dividend, the income thesis is intact. If you own them for a near-term price recovery, the timeline depends on a geopolitical outcome nobody has managed to call correctly all year.
The Bank of England holds at 3.75% but two MPC members voted for an immediate hike to 4%. UK services inflation remains the variable to watch. If it does not continue falling, that minority becomes a majority faster than the market is pricing, and the names most exposed are not the obvious ones. Infrastructure trusts, rate-sensitive REITs, and heavily indebted mid-caps are where an unexpected hike does the most damage.
On politics, the pound is the instrument to watch. A Miliband chancellorship would test sterling and the gilt market in ways Reeves never did. Internationally earning FTSE 100 names benefit from a weaker pound. Domestic mid-caps do not. Position accordingly.
One to Watch: easyJet deadline — 5 July
Castlelake has until 5 July to make a formal offer or walk away. The board has softened its language and granted due diligence access, both meaningful signals. If a firm offer comes in above 650p the stock has further to run. If Castlelake walks, easyJet faces a first-half loss of up to £560 million with no takeover premium to cushion the fall. The risk is asymmetric and the timeline is short. This is the most important single event on the UK equity calendar over the next week.
The Week Ahead
The easyJet deadline on 5 July is the obvious near-term catalyst. On Iran, any resumed diplomatic contact reverses the energy and mining trade immediately. UK inflation data mid-week will determine whether the MPC hawks gain traction. And watch sterling above everything else. The Chancellor question will not be answered this week, but the market will be pricing in the answer long before it is officially given.
Thanks for reading,
Ollz
This article is for informational and educational purposes only and does not constitute financial advice. The author may hold positions in securities mentioned. Always do your own research and seek independent financial advice before making any investment decision. Capital is at risk.
Sources
[1] Bloomberg — https://www.bloomberg.com/news/articles/2026-06-25/rachel-reeves-suggests-burnham-will-remove-her-as-uk-chancellor
[2] MoneySavingExpert — https://www.moneysavingexpert.com/news/2026/06/cash-investment-isa-reforms/
[3] Proactive Investors — https://www.proactiveinvestors.com/companies/news/1094385/ftse-100-live-london-stocks-open-to-open-indecisively-segro-surges-on-us-bid-1094385.html
[4] Investing.com — https://www.investing.com/news/stock-market-news/why-is-3i-group-stock-soaring-today-93CH-4759902
[5] Yahoo Finance — https://uk.finance.yahoo.com/news/telecom-plus-tumbles-profits-hit-084200559.html
[6] Investegate / RNS — https://www.investegate.co.uk/announcement/rns/babcock-international-group--bab/fy26-post-close-trading-update/9565130
[7] Stock Analysis — https://stockanalysis.com/quote/lon/BME/
[8] Investing.com — https://www.investing.com/news/transcripts/earnings-call-transcript-telecom-plus-shares-sink-26-after-fy-2026-outlook-reset-93CH-4754926