UK Stocks Rally Amid Oil Price Retreat and Surging Consumer Confidence

UK stocks rallied on Friday, putting them on track for a second consecutive weekly gain. The FTSE 100 index rose by 0.41% to 10,723.98 points, while the midcap FTSE 250 climbed 0.71%. Heavyweight banks led the gains, with HSBC up 1.3%, Lloyds Banking, and Standard Chartered each adding around 2%. Precious metal miners also surged 2.5% as gold and silver prices rebounded after a sharp drop earlier this week.

The oil price retreat contributed to the risk appetite increase. Investors weighed hopes of a US-Iran truce against the risk that stepped-up Houthi attacks on Saudi Arabia could disrupt supply. Energy giants Shell lost around 1%, while BP shed 3%. However, Reuters reported that BP is considering a potential acquisition of Devon Energy's operations in South Texas.

Global government bond yields eased slightly after jumping earlier this week. The British benchmark 10-year gilt yield dipped to 5.3682% after reaching a more than one-week high earlier this week. Additionally, British consumer confidence unexpectedly struck a two-year high this month as households grew more optimistic about their personal finances.