London's FTSE 100 logs third weekly loss amid doubts over Middle East ceasefire

* Labour Party suffers heavy local election losses, Reform UK gains ​ground

* British Airways ⁠owner says fuel costs will be ​2 billion euros higher in 2026

* Intertek rejects third sweetened takeover bid from EQT

* UK house prices decline for second month as ​Iran conflict ‌dampens demand

* FTSE 100 down 0.4%, FTSE 250 falls 0.2% (Updates after markets close)

May 8 (Reuters) - UK's FTSE 100 slipped on ⁠Friday as fresh clashes in the Gulf raised fears over ⁠a fragile month-long U.S.-Iran ceasefire, while investors ​digested early local election results showing heavy losses for Prime Minister Keir Starmer's Labour Party.

The blue-chip FTSE 100 index closed 0.4% lower at 10,233.07 points, marking a third straight weekly fall. The midcap FTSE 250 inched 0.2% ​lower.

* British ‌Prime Minister Keir Starmer vowed to stay in office to "deliver change" after his Labour Party suffered heavy losses in local elections that deepened doubts over his ability to govern.

* The results highlighted the splintering of Britain's two-party system into a multi-party democracy, a historic political shift, analysts said.

* "Risks of a leadership ​challenge can rise post the May local elections, though it is not a given," strategists at Bank of ‌America said in a note, adding: "if a leadership challenge were to ensue, and a left-leaning Labour leader were to emerge, risks of higher borrowing ‌would increase."

* The British pound firmed, weighing on shares of UK multinationals that earn a large share of revenue abroad.

* British Airways owner IAG fell 2.8% after warning its annual profit would be lower ​than forecast and flagged that jet fuel costs would be about 2 billion euros higher in 2026 than in 2025 due ‌to the conflict.

* Intertek shed 2.7% after rejecting a third sweetened 8.93 billion pound ($12.12 billion) takeover proposal from Swedish private equity firm EQT AB.

* Global risk sentiment was fragile after the U.S. and Iran exchanged ⁠fire in ⁠the Middle East, even as U.S. President Donald Trump played down the ‌hostilities. Oil prices rose back above $100 a barrel.

* Domestic data showed British house prices fell in April for the second ​straight month as concerns ​about the impact of the war in Iran hurt buyer demand.

* In ‌the U.S., data showed employment increased more than expected in April, pointing to continued labour market stability and reinforcing expectations that the Federal Reserve would leave interest rates unchanged for some time.

International Airlines

Intertek Group