May 11 (Reuters) - UK shares were subdued on Monday as fears of a stalemate in the Middle East conflict troubled investors, who were also assessing British Prime Minister Keir Starmer's vow to stay on at the helm.
The blue-chip FTSE 100 index rose 0.04% as of 11:24 am GMT, while the midcap FTSE 250 slipped 0.27%.
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Starmer sought to quell a mounting rebellion in his party and said he would not walk away to avoid plunging Britain into a new political crisis.
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Labour lawmakers had turned on him after his party suffered the worst local election results for a governing party in more than three decades.
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"It is worth noting that fiscal pressures are high, no matter who the Labour leader is," BofA Securities strategists wrote, adding that the government could face pressure to support households through the oil price shocks.
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Brent crude futures rose 2.6% on Monday after U.S. President Donald Trump said Iran's response to a U.S. peace proposal was "unacceptable."
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Data last month showed that British inflation rose to 3.3% in March from 3.0% in February.
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Bank of England Governor Andrew Bailey has also warned that policymakers would face a "difficult judgement call" in the coming months on whether to raise rates.
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Auto stocks were the biggest drag, falling 4.3%.
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The personal goods sector also fell 2.2%, hurt by a 2.3% drop in shares of Burberry.
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Compass Group shares rose 2.5% after it raised its 2026 profit outlook, betting on demand for workplace dining and new contract wins.
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Separately, an industry survey showed that Britain's jobs market had lost momentum in April due to cost pressures stemming from the Middle East conflict.
Reporting by Niket Nishant in Bengaluru; Editing by Sahal Muhammed
Source: Reuters