- FTSE 100 flat at 9,701
- Wall Street opens higher
- Banks given clean bill of health
- Persimmon boosted by house price data
- High Street inflation cools
4.49pm: Footsie flat
The FTSE 100 was unchanged at Tuesday’s close, finishing the day at 9,701 with investors holding off making any major moves ahead of key central bank meetings this month.
“Global markets are now focused on the US Federal Reserve’s upcoming interest rate decision, with expectations of a 25-basis-point rate cut,” Tickmill Group’s Patrick Munnelly said. “Similarly, the Bank of England is anticipated to announce a comparable rate adjustment later this month.”
3.58pm: Santa rally hopes
London stocks remained little changed towards the end of Tuesday’s session, with the FTSE up 11 points at 9,713.
XTB research director Kathleen Brooks noted that while it has been a rocky start to December trading, hopes of an end of year rally are not over yet.
“This week’s economic data dump from the US is crucial for market sentiment, as it will give us an idea of whether the world’s largest economy remains solid enough to sustain a stock market rally,” Brooks said.
“However, unless the Fed takes a massive hawkish pivot, the latest CFR global Monetary Policy Tracker is still in easing territory, which is positive for risky assets like stocks as we move into year end.
3.03pm: Quiet start on Wall Street
Markets are showing signs of a cautious rebound on Tuesday after a rocky start to December that saw sharp losses across Wall Street and in cryptocurrencies.
The Nasdaq is leading gains with a 0.8% rise to 23,471 while the S&P 500 is up 0.4% to 6,837. The Dow Jones is essentially flat at 47,291, and the Russell 2000 is lagging, down 1.3% at 2,469.
Monday’s selloff snapped five-day winning streaks for the major indexes and added a note of uncertainty to what is usually a strong month for equities. Traders are now watching to see if the so-called Santa Claus rally can still materialize.
2:01pm: Wall Street seen modestly higher
Futures were pointing modestly higher early Tuesday as investors tried to shake off Monday’s shaky start to the week.
S&P 500 futures pointed slightly higher, about 0.3%, while Nasdaq 100 contracts were up roughly 0.4%. Dow futures hovered just above the flatline, hinting at a more cautious tone ahead of the open.
Bitcoin managed a small comeback, edging back into the green and trading above $87,000. That’s a welcome pause after Monday’s slide to $84,000.
On the macro front, investors are still digesting a drip-feed of delayed government data that could shape expectations for a potential December rate cut. Monday’s weaker US factory readings, pressured by tariffs, didn’t dramatically shift those expectations, but they did reinforce the sense that the path into year-end will be data-dependent.
Earnings are relatively quiet, but there are a few names to watch. Marvell reports after the bell, with its stock already moving in premarket trading on news from The Information that it’s in advanced talks to buy chip start-up Celestial AI in a multibillion-dollar deal. CrowdStrike and Okta also step up later on Tuesday, keeping the focus on software and cybersecurity.
12.58pm: Blue-chips unfazed by BoE warning
The FTSE 100 gave little more than a shrug, sitting 21 points in the green, as the Bank of England warned that the financial system is looking distinctly wobblier. In its latest Financial Stability Report, the BoE said risks had increased in 2025 thanks to overcooked AI valuations, looser lending to big corporates and some questionable trading in government bonds.
Global threats are stacking up too, from geopolitical tension to fracturing trade flows and stressed sovereign debt markets. The bank noted that US equity valuations are now brushing dotcom-era extremes, while UK stocks have reached levels last seen before the global financial crisis. In other words, the ingredients for a sharp correction are already on the table.
11.10am: Now more on the stress test
The Bank of England has finally eased its grip on the sector, trimming bank capital requirements for the first time in a decade. Tier 1 demands will fall from 14% to 13% in early 2027, courtesy of a cut to Pillar 2A. The Financial Policy Committee framed this as an act of encouragement, saying banks should now feel “greater certainty and confidence” about actually using their capital to lend. In central-bank language, that counts as a rallying cry.
The review also revisited the UK’s leverage ratio, which quietly forces the largest banks to hold just over 4% capital against total assets once buffers are added. The BoE conceded that its regime is tougher than the US and EU equivalents, hence its promise to “review” how the leverage rule works. That is policymaker code for admitting the dial may be set a touch too high.
This year’s stress tests explain the newly relaxed mood. Lloyds, Nationwide, NatWest and Santander UK suffered most under the domestic macro shock, while Barclays, HSBC and Standard Chartered absorbed hits from global downturns. Still, none required extra capital, and for the first time since 2023 the BoE even named individual banks.
Yet the countercyclical buffer stays at 2%, a level banks dislike but regulators refuse to budge from. And the Financial Stability Report notes risks have risen anyway, thanks to inflation, cyber threats and the joys of an interconnected financial system. UK banks may be robust, but the world around them remains stubbornly unhelpful.
9.45am: Banks pass stress test
The FTSE 100 spent Tuesday morning staring at its shoes, unmoved by a clean bill of health for the UK banking sector.
As AJ Bell’s Russ Mould put it, the banks “passed the Bank of England’s stress test with flying colours,” proving they could survive a brutal economic downturn and still keep lending.
Even so, miners and healthcare stocks dragged the index back to flat.
The day's big movers were to be found sprinkled among the mid-caps, with Victrex and On The Beach buoyant after better-than-expected updates on current trading.
We mentioned Persimmon and Taylor Wimpey earlier as being beneficiaries of the latest house price data. Both were also upgraded by RBC Capital.
8.30am: Footsie nudges into the green
And we're off. The FTSE 100 defied predictions by the spread-betters by opening in the green - but only just. The blue-chip index nudged six points higher in the early exchanges to 9,708.79.
Leading the board was Persimmon, buoyed by the latest house price data, which was generally reassuring for the sector.
The Nationwide’s latest index shows the average home now costs £272,998, with annual price growth easing to 1.8%, down from 2.4% in October.
Monthly growth, however, picked up to 0.3%, beating expectations for a modest 0.1% rise.
Nationwide’s chief economist, Robert Gardner, said the market has shown “resilience” in recent months.
Mortgage approvals remain close to pre-pandemic levels and prices are edging up despite borrowing costs being more than twice what they were before Covid. He noted that weak consumer confidence and signs of softer employment make the steady performance all the more notable.
Gardner also played down the impact of the property tax changes announced in last week’s Budget. The new council tax surcharge on homes worth over £2 million, widely dubbed a mansion tax, will apply only to a small share of properties, though increased taxes on rental income could strain supply in the lettings market.
Looking ahead, Nationwide expects affordability to improve gradually if wages keep rising faster than house prices, with some relief likely if interest rates ease next year.
Analysts say November’s stronger-than-forecast price rise suggests buyers who paused ahead of the budget may now return, potentially lifting activity into the new year.
7:57am: High Street inflation eases
Shop prices cooled again in November as retailers rolled out Black Friday discounts earlier than usual, offering bargains across categories like beauty, electricals and fashion. New figures from the British Retail Consortium and NielsenIQ show that annual shop price inflation slipped to 0.6%, down from 1% in October. Month on month, prices nudged lower by 0.1%, following a 0.3% drop the previous month.
Non-food goods continued to drive the slowdown, with prices falling 0.6% year on year. Food inflation remained higher but eased noticeably, dropping to 3% from October’s 3.7%. Both fresh and ambient foods saw price pressures soften: fresh items rose 3.6% over the year, while ambient goods increased 2.4%.
BRC chief executive Helen Dickinson said early Black Friday competition “hit fever pitch”, helping shoppers secure deals across several big-ticket categories. She noted that food prices are still rising overall, but widespread promotions took the edge off increases in staples such as dairy, fruit, bread and cereals. Oils, fats, meat and fish, however, remain stubbornly expensive due to higher production costs.
Dickinson warned that rising employment costs could push prices higher in the new year, potentially weighing on confidence. NIQ’s Mike Watkins added that retailers will have to keep price rises in check if they want shoppers to spend during the Christmas rush.
Pre-market: UK blue-chips set to buck the positivity
The FTSE 100 looks set to open 10 points in the red at 9,693, with London bracing for a softer start despite a firmer tone across much of Asia.
Regional markets kicked back into gear Tuesday after a hesitant open to the week, buoyed by yet another batch of weak US data that has hardened bets on Federal Reserve rate cuts.
The logic is familiar: a softening labour market plus stabilising inflation equals an easier Fed. And for now, that narrative is winning.
A ninth straight month of contraction in the Institute for Supply Management’s manufacturing survey only reinforced the sense that the US economy is slowing just enough to keep policymakers dovish.
Asia took that cue and ran with it. Hong Kong, Sydney, Seoul, Singapore, Taipei, Wellington, Manila and Jakarta all pushed higher, while Shanghai slipped.
Tokyo clawed back some of Monday’s losses as traders processed Bank of Japan governor Kazuo Ueda’s weekend hints at a possible rate hike.
Those remarks jolted global risk appetite, sent two-year Japanese bond yields through 1% for the first time since the financial crisis, and knocked crypto back on its heels.
After hours in the States, America's main stock benchmarks ended Monday in the red.