Investing.com -- British stocks reversed gains on Monday even as housebuilders surged after the government announced a state-backed equity loan scheme for first-time buyers, with Chancellor John Healey using the Labour conference to pledge fiscal discipline ahead of next month's budget.
The FTSE 100 fell 0.1%, while Germany's DAX and France's CAC 40 were flat. Sterling is at $1.3257, up just 0.09%.
Barratt Redrow led FTSE 100 gainers with a surge of 11.7% after the government announced the "Your First Home" scheme at Labour's Liverpool conference.
The plan, to be confirmed at the Oct. 28 budget, will support 2.5% deposits backed by 20% government equity loans for buyers of new-build homes, with household income and local price caps targeting support.
Healey told delegates he would earn the "politics of hope" through "fiscal discipline, through good work, through strong industries," declaring he and Burnham were "in lockstep" on the fiscal rules.
Higher borrowing costs have cost him roughly half of the £23.6 billion buffer he inherited from Rachel Reeves, with UK two-year gilt yields rising as much as five basis points to 4.91% on Monday.
Healey also committed £6 billion to shipyards including nuclear deterrence and announced a £300 million Rolls-Royce investment in UK factories.
U.S. Central Command refuted Iran's claim of "full control" over the Strait of Hormuz, saying the assertion was "false" and that "Iran has no navy because American forces sank it."
Supreme Leader Mojtaba Khamenei separately said enemy forces had been pushed to the Arabian Sea and would soon be cleared from there entirely.
Iran's rial fell to a historic low of 2.3 million to the dollar, with annual inflation at 61.4%, as U.S. sanctions tighten. U.S. President Donald Trump rejected Iran's seven-day ceasefire proposal, which U.S. envoy Mike Waltz said sought "billions in frozen funds" and sanctions relief, lifting oil prices.
Iran's Abbas Araghchi said Tehran was "ready for real diplomacy" but would fight "even if it comes to an apocalyptic war."
Jefferies said it remains "in the optimistic camp" for a "fudge" deal, with strategist Mohit Kumar arguing Trump wants a win before the midterms.
Five men were arrested near RAF Fairford, used by U.S. bombers against Iran, on suspicion of preparing a terrorist act. Prime Minister Burnham called it "deeply concerning," while Defence Secretary Wes Streeting said it would be "very unwise" to speculate on Iran's involvement.
Brent futures was up up 1.73% $99.09 a barrel, while WTI rose 2.23% to $94.57. Gold futures fell 3.25% to $4,182.15 an ounce, while spot gold dropped 3.15% to $4,150.86.
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