- FTSE up 54 points at 10,238
- New intraday record high of 10,250 reached
- UK monthly GDP better than expected at 0.3%
- Schroders tops blue-chip risers
- Dunelm tumbles after profit warning
5:05pm: Another record day
The FTSE 100 continued its upward run, notching a new record high up 54 points at 10,238.
4.15pm: Good day for blue-chips, even better for mid-caps
The FTSE 100 index has almost wrapped up another solid day, gaining 0.6%, with the FTSE 250 surging over 340 points or 1.4% to a new four-year high above 23,280.
Schroders is the top riser on the blue-chip index, up almost 9% after saying it expects full-year profits to beat market forecasts.
Among the mid-caps, Ashmore Group is up 20% now, having reported on a return to inflows in the past quarter.
Analysts at UBS said the $2.6 billion of headline inflows in the asset manager's second quarter was a "strong beat vs consensus of +$0.1bn and marks the first quarter of headline inflows in over 4 years and its best quarter since 2019".
Savills is another strong riser as the estate agent said it expects 2025 PBT to be at least in line with consensus, driven by a surge in late activity as UK budget-related delays were unwound and transactions completed before year-end.
The big faller in the FTSE 350 is Dunelm, down 18.9% as the retailer warned that full-year PBT is now expected to be at the "lower end" of consensus forecasts, with the range currently £214-227 million.
Dunelm stated that the past quarter was more challenging than the prior one, especially through Black Friday and into December, signalling the continued pressure from a challenging macro environment, facing an "especially high level of competitive activity" in digital marketing and discounting.
Analyst Russ Mould at AJ Bell says the chain was "potentially not helped by a Budget-inspired slowdown in the property market which will have meant fewer people were looking to spruce up their new home with curtains or soft furnishings".
He says Dunelm has "also been the master of its own downfall in some areas", with availability issues in furniture.
"A key tenet of retail is making sure you have the right products in the right place at the right time and at the right price point for shoppers. Get this bit wrong and any retailer is likely to run into problems.
“When you add to the mix the pressure from rising costs, Dunelm has it all to do to improve performance and rebuild its credibility with the market."
3.47pm: AI argument
Artificial intelligence is likely to "usher in a new era of mass unemployment" in the capital, Sadiq Khan will warn in a major speech later today, according to newspapers that have been sent a copy of the mayor of London's annual Mansion House speech.
Khan will say the capital is more susceptible to the changes brought about by AI due to having a larger amount of white-collar workers in industries such as finance, media, law, accounting, consulting and marketing.
Research suggests 70% of skills in the average job will have changed by 2030, while research by City Hall has found that over half of London workers expect AI to affect their jobs in some way in the next 12 months.
He will call on ministers to prevent the swathes of job cuts, saying there is a "a moral, social and economic duty to act".
However, Khan does sees significant potential benefits from AI for London and the UK in helping public services and "turbocharging" productivity.
Tarek Nseir, co-founder at enterprise AI consultancy Valliance, unsurprisingly has a different view.
Framing AI as a "looming engine of mass unemployment is fear-mongering", he says, and could "risk undermining confidence in a high-potential and exciting technology at the very moment UK businesses are supposed to embrace it".
He adds that "the real challenge here isn’t mass unemployment, it’s the value lost when businesses invest in AI without the capabilities to deploy it properly".
2.50pm: Wall Street rebounds
US stocks have opened higher, with tech giants rebounding from yesterday's sell-off.
Nvidia and Broadcom are both up around 2%, while AMD and Micron have both jumped almost 4%.
The Nasdaq has climbed 0.85% in opening trades, with the S&P 500 rising 0.5% and the Dow Jones 0.25%.
Top risers in the S&P are all from the wider semiconductor sector: Applied Materials, KLA-Tencor, Lam Research and ASML.
Biggest fallers in the S&P include oil and gas group APA, Occidental Petroleum and Devon Energy.
Back in London, the FTSE remains roughly in the sideways channel it has been in since 10.30am.
2.16pm: Lending in focus
UK lenders have recorded the sharpest rise in credit card defaults in nearly two years during the final quarter of 2025, according to Bank of England data, as households leaned harder on unsecured borrowing to get through the festive period.
It's a bit of a reality check from the BoE after the positive GDP numbers earlier.
Mortgage demand was also down sharply, hitting a two-year low.
Via the Telegraph, Ruth Gregory at Capital Economics (which has cut us off and only provides its commentary to major newspapers and media groups now) said: “We shouldn’t get too carried away. With the economy still contending with the lingering drags from high interest rates, high taxes and weak overseas demand, we doubt this pace of growth will be sustained.”
Also on bank stocks, Fawad Razaqzada at FOREX.com, says this sector remains "a clear area to watch" after yesterday’s decline on Wall Street was led by the financial sector after what he sees as a mixed start to fourth-quarter earnings season (counter to Kenny Polcari below).
"Wells Fargo and Citigroup both disappointed, with Citi reporting a notable drop in quarterly profits despite modest revenue growth.
"JPMorgan had already dampened expectations earlier in the week, pointing to weaker investment banking revenues and higher provisions for potential loan losses.
"Adding to the pressure is renewed political scrutiny, after Trump floated the idea of capping credit card interest rates at 10%.
"That proposal comes after a stellar year for US banks in 2025, during which the sector added roughly $600 billion in market value.
"Against that backdrop, the recent weakness may ultimately prove to be a corrective pause rather than the start of a deeper trend, particularly for institutions with solid balance sheets."
1.19pm: Persimmon downgraded, but shares rebound
Persimmon PLC (LSE:PSN) is one of the top risers on the FTSE today, with the shares up almost 3% after falling 5.4% over the past two days after Tuesday's trading update.
Deutsche Bank has downgraded its rating to 'hold' from 'buy' today, saying that despite the stronger-than-expected performance in 2025, much of the good news is now felt to be reflected in the share price.
Profit growth of around 5% this year is achievable rather than ambitious, says DB, which said Persimmon deserves a premium rating versus peers, citing higher returns on tangible equity and lower exposure to fire-safety remediation costs.
However, investors seem to be paying more heed to what JP Morgan is saying, as the US bank sees Persimmon as the most attractively valued UK housebuilder using a different metric.
The JPM analysts say they increasingly view enterprise value to EBIT as a more effective metric than traditional valuation tools such as price to net asset value or price to earnings.
It cited the effects of building safety provisions, the use of land creditors, and earnings currently around 60% below peak levels across the sector.
On this basis, Persimmon stands out as one of the cheapest names within JP Morgan's coverage, despite trading at a premium on traditional metrics.
12.23pm: Wall Street futures perk up
US futures are turning positive as we move into the afternoon, led by an expected rebound for tech stocks, after Donald Trump slapped a 25% tariff on certain AI chips the day before.
Nasdaq futures are up 0.8%, with the S&P 500 predicted to open 0.3% higher and the Dow Jones called just a bit above flat.
Market analyst Kenny Polcari at Slatestone feels that US earnings season has gone well this week and yesterday's economic data "crushed it" as mortgage applications surged, retail sales were better than expected and existing home sales blew straight through estimates.
Stocks fell despite seven out of seven earnings beats so far, with the Dow losing 42 points but recovering from a 340-point deficit in late morning, while the S&P lost 0.5% and the Nasdaq got "whacked over the head again" losing 1% as the Mag 7 plunged 1.6%.
On the upside, the Russell 2000 bucked the trend and rose 0.7% and the Equal Weight S&P rose 0.4%.
Polcari says the reason for the tech weakness was November PPI inflation coming in higher than expected, suggesting inflation pressures are building, "not what the doctor ordered".
Rumours of the White House's AI chip ban, hitting the Nvidia H200 processor and others, which was confirmed overnight, also is likely to have weighed.
Atlanta Fed President Rafael Bostic also cautious tone, making it clear that the Fed is in no rush to cut rates, as the inflation fight is not over, with price pressures too high relative to the Fed’s 2% target.
Fed funds futures are currently pricing in just a 5% chance of a rate cut on January 28, a 23% chance for the March 18 decision, an 18% chance for April, and a 50% chance in June.
"So, the rotation out of ‘richly’ priced tech into a more appropriately valued, economically sensitive names sent the Nasdaq, the Mag 7, Semi’s, Cyber, etc into a tailspin, marking the worst decline in a month," says Polcari.
Back in Blighty, the Footsie is up 0.45% and the more domestically focused FTSE 250 is on the charge, rising 211 points or 0.9% to 23,168.
This is the highest the London mid-cap index has been in four years. The peaks from 2021 above 24,000 are still some way away.
11.35am: Banks and financials offset commodity weakness
London stocks are out in the lead in Europe, despite the handbrake from a pullback in oil and precious metals.
Financials are driving the gains, along with grocers.
Market analyst Joshua Mahony at Scope Markets highlights the presence of banks among the top risers this morning.
"Strong gains for the likes of HSBC, Barclays, and NatWest bring a recovery from a sector that has been hit by Trump’s recent move to limit credit card interest rates to 10%," he says.
BP is down over 2%, with Shell only 0.3% lower as oil prices turn lower after reaching a three-month high earlier in the week.
Mahony points to Donald Trump cooling calls for near-term military action in Iran, saying he was reassured by information that the regime would stop killing people involved in the recent protests.
"While many will look at this as another opportunity for the US to open up a maligned nation to higher oil exports, the fact is that Iran already produces much more that Venezuela and that output is at risk if the government falls.
"Concerns around the potential disruption to the flow of oil through the straits of Hormuz, coupled with the potential impact on Iranian output in the event of a military conflict means that the recent bearish oil thesis has been turned on its head this week.
“Financial markets took those comments to mean there was less of a chance the US takes military action against Iran, and therefore a lower risk of disruption to oil supplies."
Looking ahead, he says traders are cautious about the impending Supreme Court judgment over the legality of Trump’s tariffs in their current format, even though the US administration has "a raft of alternate methods lined up to reimpose tariffs in the event of a defeat, but that would invariably provide additional confusion as they once again rip up the rules and provide a new set of policies for businesses to adhere to".
10.18am: FTSE on the rise
The FTSE 100 is on the rise again.
Schroders is top of the risers, followed by 3i, Londonmetric Property, Marks & Spencer and Tesco.
Over in mainland Europe markets are mostly in the red, with the DAX down 0.1% in Frankfurt and the CAC falling 0.5% in Paris.
Here's market analyst Neil Wilson at Saxo, who points out that some sectors have been a given a lift after TSMC, the world’s largest contract chipmaker, reported record earnings thanks to strong AI chip demand.
"The move sent ASML up 7%, ASM International over 9% higher and BE Semiconductor 5% higher."
8.45am: Schroders hits highest since 2023
Schroders PLC (LSE:SDR) is the top Footsie riser, with its shares up 8% to their highest in two and a half years after the asset manager said profits for 2025 should exceed expectations.
Adjusted operating profits of at least £745 million are expected for the past calendar year, up from £603.1 million in 2024.
Adjusted net operating income is predicted to top £2.6 billion, reflecting improved management and performance fees, carried interest, and market returns.
8.15am: FTSE hits new high, then drops into red
The FTSE opened higher but the positivity quickly dissipated.
In initial trades the index jumped to a new high of just under 10,202, but is now three points in the red at 10,182.
Acting as the main weights around its neck are fallers led by precious metals miner Fresnillo, oiler BP, housebuilder Barratt Redrow and retailer Kingfisher.
Other builders Persimmon and Berkeley are also in the red, following the update from rival Taylor Wimpey (see below).
7.56am: Pub co enjoys strong trading, housebuilder more muted
A couple of company updates.
Pub company Mitchells & Butlers PLC (LSE:MAB) has reported strong festive sales and says it remains confident about managing around £130 million of extra costs expected in the year.
The owner of the All Bar One, Harvester, Toby Carvery and Nicholson's chains revealed total sales up 3.5% and like-for-like sales up 4.5% in the 15 weeks to 10 January, the first quarter of its financial year.
It highlighted a 7.7% rise in like-for-like sales during the core three-week festive period, with the five key trading days over Christmas and New Year delivering growth of 10.5%.
Elsewhere, housebuilder Taylor Wimpey PLC (LSE:TW.) has warned that operating margins are set to fall this year, even after delivering a 'solid' performance in 2025, as affordability pressures continue to weigh on demand and a weaker order book pushes profits towards the second half.
It expects operating profit margins to be lower in 2026 than in 2025, citing softer pricing on bulk deals, modest construction cost inflation and a lower starting order book.
Jennie Daly, the chief executive, said "we have seen a good level of enquiries" but demand remained "muted", particularly among the important first-time buyer category.
7.41am: GDP analysis
Some analysis of the GDP numbers from around the Square Mile.
"Looking through the volatility, GDP has been trending up very gradually in recent months," says Rob Wood, chief UK economist at Pantheon Macroeconomics.
As the November rebound was better than expected and September was also upgraded, GDP now looks "on track" to rise 0.2% quarter-to-quarter in the fourth quarter, above the Bank of England’s expected flat forecast, Wood notes.
The jump in auto production means there is little further recovery expected now.
"Looking ahead, we see a good chance that GDP growth improves to 0.4% quarter-to-quarter in Q1, as uncertainty ahead of the Budget has passed while any residual seasonality in the data favours a rebound in the New Year.
"Growth is weak by historical standards, but it seems to be only a little below the UK’s now reduced potential once we look through the volatility caused by Budget chaos and September’s cyber-attack, which should limit the emergence of spare capacity and keep the MPC cautious."
Sanjay Raja, Deutsche Bank’s chief UK economist, says: "What a difference a month makes. Last month, we warned of a Q4-25 contraction given how weak GDP data were trending. But upward revisions to previous months (including, and importantly, September GDP), followed by a huge bounce back in November GDP have shifted Q4-25 expectations meaningfully."
He says "budget uncertainty was a thing of the past" and expected the UK "will very likely dodge a Q4-25 contraction – something we feared last month".
What does this mean for the MPC? "On the margins, this should raise the bar for a February rate cut. Next week's labour market and inflation release will be more important measures for BoE pricing, but with the economy now on a firmer footing than expected the impetus to accelerate rate cuts is likely lower."
While there will be some testing times for the UK, with the labour market looking quite gloomy and political uncertainty potentially rearing its head ahead of local elections in spring, but it’s "not all doom and gloom" as he sees "some strong tailwinds emerging" including inflation set to drop "meaningfully" and "easy credit and financial conditions supportive of growth".
Anna Kortis, partner at McKinsey & Co, agrees that the 0.3% growth "suggests the economy may be finding a floor".
She takes this opportunity to flag that GDP growth is influenced by foreign investments, where "there could be green shoots of opportunity. Our new research shows the UK is now the world’s third-largest destination for announced greenfield foreign direct investment, attracting around $85bn a year since 2022."
7.27am: UK GDP beats forecasts as services grow, autos rebound
More details on those new UK GDP figures, where the headline figure showed growth of 0.3% in November, beating the 0.1% consensus forecast.
This followed a fall of 0.1% in October and growth of 0.1% in September 2025, which was revised up from a previous estimate of a 0.1% fall.
Services grew by 0.3% in November and industrial production was up 1.1%, but construction fell by 1.3%.
Automotive production rocketed 25.5% month-to-month, further recovering from the 28.6% drop in September caused by the cyber-attack at Jaguar Land Rover.
The services sector performed better in November following a weak October, said ONS director of economic statistics, Liz McKeown.
"This was partially offset by a fall in manufacturing, where three-monthly growth was still affected by the cyber incident that impacted car production earlier in the Autumn. However, data for the latest month show that this industry has now largely recovered.
“Construction contracted again, registering its largest three-monthly fall in nearly three years.”
7.16am: FTSE 100 called higher as UK GDP expands
The FTSE 100 is expected to open higher on Thursday as fresh figures showed the British economy grew more than expected.
UK gross domestic product increased 0.3% in November, higher than the 0.1% that the market expected.
London's blue-chip index has been called 45 points higher, adding to the 47 added the day before as it finished at another record closing high of 10,184.35.
US stocks had a worse time of it overnight, with the Nasdaq falling 1% and the S&P 500 dropping 0.5%, though the Dow Jones was just below flat.
Asian markets are in the red this morning too, led by Japans Nikkei, which is down 0.4%.
Back in London, companies reporting today include Taylor Wimpey, Dunelm, Mitchells & Butlers, Schroders, Oxford Instruments, Ashmore Group, Savills, Safestore Holdings and Rathbones.