London pre-open: Stocks to fall as US-Iran peace hopes fade; Starmer on the brink

(Sharecast News) - London stocks were set to fall at the open on Tuesday as hopes of a peace deal between the US and Iran faded, and as UK prime minister Keir Starmer was set to hold a cabinet meeting among growing calls for him to quit.

The FTSE 100 was called to open around 60 points lower.

Sentiment took a hit after US president Donald Trump told reporters at the White House that the ceasefire with Iran was on "massive life support".

Danske Bank said: "Trump is reportedly meeting his national security team to consider next steps, including a possible resumption of military action and a renewed naval mission in the Strait of Hormuz.

"The conflict is also likely to be on the agenda when he meets President Xi Jinping this week."

On home shores, meanwhile, Starmer was due to hold a crucial cabinet meeting after more than 70 MPs called for him to quit after Labour's crushing defeat in the recent local elections.

On the macro front, investors were eyeing the US consumer price index for April at 1330 BST. Ipek Ozkardeskaya, senior analyst at Swissquote, said inflation is expected to have risen due to the Iran-led jump in energy prices.

"A higher-than-expected reading could revive hawkish Federal Reserve (Fed) expectations, push yields higher and weigh on equity valuations, while a softer-than-expected print would offer relief that energy-led inflation is being contained," she said.

In corporate news, bakery chain Greggs held annual guidance and said like-for-like sales in the first 19 weeks of the year had improved against what remained a challenging market hit by weak consumer confidence and the Iran war.

LFL sales rose 2.5% during the period with cost inflation still expected to be 3%, the company said in a trading update. However, it warned that should the war become prolonged the food retail industry "will likely see higher overall cost inflation through the end of 2026 and into 2027".

Telecommunications giant Vodafone posted a solid set of full-year results, with revenue and earnings both improving as the consolidation of Three UK and continued service‑revenue momentum underpinned performance.

Vodafone said total revenues rose 8% in FY26 to €40.5bn, supported by an 8.8% increase in service revenue to €33.5bn and contributions from the Three UK deal. Adjusted underlying earnings increased 4.5% on an organic basis to €11.4bn after leases, while operating profits of €2.8bn were a marked improvement on the prior year's €400m loss.