FTSE 100 records biggest monthly rise since February, lifted by earnings and energy

July 31 (Reuters) - London's FTSE 100 dipped from record highs on Friday, but registered weekly and monthly gains as robust earnings buoyed markets through a week of central bank decisions and Middle East hostilities.

The blue-chip FTSE 100 index, which closed down 0.3% at 10,868.05 points, marked its biggest monthly jump since February. The midcap FTSE 250 dipped 0.4% on the day and notched a third week of gains in a row.

• Heavyweight energy stocks added 1.9% as Brent crude prices climbed above $90 a barrel. The sector has gained over 15% in July, outperforming its peers, as U.S.-Iran hostilities escalated, threatening fuel supplies. [O/R]

• Meanwhile, British finance minister John Healey said he will hold his first budget on October 28 and pledged to stick to the borrowing rules he inherited from his predecessor Rachel Reeves.

• Economists say the government has only a small margin of error for hitting that target and some of Prime Minister Andy Burnham's policy priorities — such as extra defence spending and better social care — will put more strain on the public finances.

• The Bank of England held interest rates on Thursday, but the number of dissenters was three compared with expectations of two, as the impact of the Iran conflict on the economy worried policymakers.

• Corporate earnings were in full swing, with investor attention split between reports and macro factors.

• NatWest gained 3.2% after the lender reported a better-than-expected first-half operating profit before tax of £4.3 billion ($5.8 billion) and raised its outlook for the year.

• British Airways owner IAG dipped 1.5% after the company trimmed its 2026 capacity outlook to flat.

• IG Group slipped 1.5% to the bottom of the FTSE 100 after it agreed to acquire U.S. daily fantasy sports and prediction markets operator Underdog for up to $1.3 billion.

• Sainsbury's inched up 1% after the supermarket chain agreed to sell Argos for at least £120 million ($161 million), exiting the general retail business.

• Greggs shed 7.5% to end at the bottom of the FTSE 250 after RBC downgraded the fast-food chain's stock to "sector perform" from "outperform".

(Reporting by Purvi Agarwal in Bengaluru; Editing by Vijay Kishore and Barbara Lewis)