- FTSE 100 rises 59 points to 10,686
- Wall Street rallies on tariff ruling
- St James's Place upgraded
- UK public sector records surprise £30bn surplus
5.05pm: In the green
The FTSE 100 finished the week on a high note, adding 59 points at 10,686.
“European equities moved higher as eurozone private-sector growth strengthened to its fastest pace since November, supported by the sharpest rise in manufacturing output since August 2025 and firmer services activity,” IG chief technical analyst Axel Rudoph said.
“Negotiated wage growth accelerated in the fourth quarter, while UK retail sales rose at their fastest pace in 20 months, adding to signs of resilience in the European economy.”
3.50pm: Trump’s tariffs ruled unlawful
US stocks rallied late morning after the US Supreme Court ruled that President Donald Trump exceeded his authority by imposing broad tariffs on Canada, Mexico, and other countries under emergency powers, striking down a key element of his trade and economic strategy.
In a 6-3 decision in Learning Resources, Inc. v. Trump, the Court sided with lower courts that found Trump had improperly used the International Emergency Economic Powers Act (IEEPA) to justify tariffs tied to national emergencies, including fentanyl trafficking and international trade deficits.
Chief Justice John Roberts wrote that while the law allows the president to take action in economic emergencies, it does not authorize tariffs.
3.31pm: Blue-chips spark into life
UK blue-chips pulled out of their early afternoon trough, reclaiming lost ground after the US traded in the green in spite of a surprisingly weak GDP print. The Footsie was up 79 points, though it looks unlikely to hit a new record high this week. Currently, it is up 250 points for the week.
Wall Street started Friday’s session mixed as investors reacted to new data that showed the American economy expanded at an annualized rate of just 1.4% in the final three months of 2025, well short of the 2.9% economists had forecast.
The Dow Jones was down 0.3%, the S&P 500 fell 0.1%, while the Nasdaq edged 0.2% higher at the open.
The data, published Friday by the Bureau of Economic Analysis after a delay caused by the 43-day government shutdown last autumn, showed a sharp deceleration driven by falling government spending and exports, alongside softer consumer activity. For the full year, the US economy grew 2.2%, down from 2.8% in 2024.
Meanwhile, the Commerce Department reported that inflation picked up in December, surpassing expectations and highlighting ongoing price pressures in the economy.
Consumer prices rose 0.4% in December from the previous month, the largest monthly gain since February 2025. This followed a 0.2% increase in November. On a yearly basis, overall prices were up 2.9% compared with December 2024, marking the biggest annual rise since March 2024 and exceeding the Federal Reserve’s 2% target.
Excluding the often-volatile food and energy sectors, core prices also climbed 0.4% in December, up from 0.2% in November. Year-over-year, core inflation rose 3%, its fastest pace since February 2025, signaling persistent underlying price pressures in the economy.
2.30pm: US futures point to negative start
US stock futures edged lower again on Friday on ongoing concern over brewing tension between the US and Iran and as investors awaited economic data for further direction.
Contracts on the Nasdaq dropped 0.2%, with those for the Dow Jones and S&P 500 close behind.
US stocks closed in negative territory on Thursday, as oil prices rallied on US-Iran tensions. The Dow Jones was down 0.5%, while the S&P 500 and Nasdaq were both down 0.3%
1.44pm: St James's place well-bid
St James's Place shares rose as much as 3% after UBS upgraded the stock to 'buy' from 'neutral' and set a 12-month price target of 1,465p, down from 1,565p.
The Swiss bank reduced its target price by 6% to reflect lower long-term flow assumptions linked to potential disruption from artificial intelligence-enabled advice.
The broker nevertheless argued that a moderate level of disruption was already reflected in the valuation.
UBS described St James’s Place as its preferred UK asset gatherer, citing earnings growth and valuation.
12.33pm: Footsie off its session high
UK equities showed resilience on Friday but pulled back from session highs as US futures pointed to a weaker open on Wall Street, with investors cautious ahead of a clutch of economic releases that could shape the outlook for Federal Reserve rate cuts.
S&P 500 futures slipped marginally lower in early trading, trimming gains made earlier in the session, while Nasdaq 100 and Dow contracts also gave back ground. The retreat follows the end of a three-day winning streak for both the Dow and the S&P 500 on Thursday.
The day's main event is the Personal Consumption Expenditures index, the Fed's preferred inflation gauge, alongside the first estimate of fourth-quarter GDP.
Economists expect headline PCE to show annual growth of 2.8%, with core PCE coming in at 3%, well above the central bank's 2% target. Fed officials remain split on the pace of future rate cuts, with some seeking clearer evidence that price pressures are easing before moving again.
Oil prices stayed elevated after President Trump said he would decide within 10 days whether to pursue military strikes against Iran, keeping a geopolitical premium baked into both Brent and West Texas Intermediate contracts.
11.15am: Nudging higher
The FTSE 100 ended the week in reasonable shape as it crept back towards record territory once more with a 69-point gain.
Retailers provided one of the day's more encouraging stories, lifted by official figures showing January retail sales recorded their biggest monthly jump since May 2024, pushing activity to a two-year high.
After a difficult stretch for the UK consumer, the data offered a degree of reassurance that spending resilience has carried into the new year, and investors were quick to reward a sector that has spent much of the past year out of favour.
Iran tensions give energy stocks a lift
Threats of military action against Iran from the Trump administration, should the country fail to agree a deal on its nuclear programme, rattled markets on Thursday. US equities sold off and most Asian markets followed suit overnight.
The resulting rise in oil prices offered some compensation to the heavyweight energy stocks that anchor the FTSE 100, helping to cushion the broader index.
Anglo American's copper problem, and its De Beers headache
What is likely to be the final full-year results before Anglo American completes its combination with Teck Resources laid bare the strategic logic behind the deal. Copper has become the mining sector's most coveted metal, its role in AI data centres, electric vehicles and renewable energy driving prices toward record levels.
The De Beers diamond operation continues to drag. A third write-down in three years reflects weak market conditions, a broader softening in diamond demand, and mounting competition from lab-grown stones. Efforts to sell the business are moving slowly, and there is little sign of that changing soon.
10.15am: Economy perks up in February, but the hiring freeze bites
Good news for the UK economy! February saw private sector output tick up to a 22-month high, according to S&P Global. Manufacturing really stole the spotlight, hitting a 17-month peak, thanks to a surge in export orders that hasn’t been seen since the pandemic. Services were a bit more chill, slipping slightly, but still showing solid growth.
New orders are on the rise for the third month running, though jobs are still shrinking, marking 17 months of employment decline. Companies are juggling redundancies, hiring freezes, and tech investments to keep output ticking along without adding staff.
Costs are holding steady, with inflation easing slightly, though output prices, especially in services, are creeping up due to higher wages and supplier charges. Chris Williamson from S&P Global says the early data points to a modest GDP bump of around 0.3% in Q1, giving the Bank of England something to think about as it balances growth with labour market woes.
9.55am: Footsie builds on gains
The FTSE 100 has extended its gains as the morning progresses, now up 53 points at 10,680.41, a gain of half a percent.
Luxury goods group Burberry Group PLC (LSE:BRBY) is now top of the leaderboard, rising 3%, followed closely by energy company Centrica PLC (LSE:CNA).
“The FTSE 100 started off its final trading session of the week in decent fettle, although remained a distance from its recent record highs above 10,700,” commented AJ Bell's Russ Mould.
Mould noted that concerns over potential military action by the Trump administration if Iran fails to reach a nuclear deal sparked market unease yesterday, with declines in US stocks mirrored across most Asian markets this morning.
“A resulting move higher in oil prices was helpful for the heavyweight energy stocks on the UK’s flagship index, and retailers were also in demand after official retail sales figures for January showed the biggest monthly bounce since May 2024 to a two-year high," Mould added.
“After a tricky period for the UK consumer there was some resilience on show at the start of the year and that, in turn, provided a boost to the unloved retail space.
9.15am: More morning movers
Chemring Group (LSE:CHG) slipped 3.5% after a slower-than-expected start to the year, hit by production hiccups at its Tennessee plant. Despite this, the defence tech firm kept its full-year outlook unchanged, with a strong £1.364bn order book and new contracts, while CEO Michael Ord flagged solid growth potential from rising Nato and allied defence budgets. Read more
Diageo PLC (LSE:DGE) jumped 1.8% to 1,813p on reports that new CEO Dave Lewis is planning a major shake-up of the executive team, trimming layers of management. The former Tesco chief, nicknamed “Drastic Dave,” faces the challenge of reviving the spirits giant amid sluggish demand and US tariff headwinds. Read more
Anglo American PLC (LSE:AAL) shares edged up 1% to 3,612p after reporting a slight rise in 2025 underlying EBITDA to $6.4bn and $1.8bn in cost savings, with copper and iron ore outperforming De Beers. CEO Duncan Wanblad hailed strong operational delivery, while the miner gears up for its proposed Anglo Teck merger with Canada’s Teck Resources. Read more
BlackRock Smaller Companies Trust jumped 4% to 1,433p after announcing a merger with Throgmorton, creating a £780m growth-focused trust—the UK’s largest in the sector. Investors can choose cash or shares, overlapping portfolios will be co-managed, fees cut to the sector’s lowest, and a five-for-one share split aims to make the trust more accessible to smaller investors. Read more
8.30am: Good news for the Chancellor
The UK public sector started 2026 on a high note, recording a £30.4 billion surplus in January, well above last year’s £14.5 billion and ahead of economists’ expectations of £24 billion.
Strong tax receipts played a big role. Self-assessed Income and Capital Gains Tax brought in £46.4 billion, £10.5 billion more than January 2025, boosted in part by the usual January rush and fears of future tax hikes.
Borrowing for the financial year to January was £112.1 billion, down 11.5% from last year, while the public sector current budget showed a £40.9 billion surplus for the month.
Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said: "Good news for the Chancellor, but the pressure to spend will intensify."
Indeed, much of the surplus came from lower-than-expected interest payments and underspending, while other areas of spending were higher than forecast. With the government already committing an extra £5 billion to cover council special educational needs and disabilities (SEND) deficits and signalling faster defence spending, January’s strong numbers may only offer temporary relief.
January’s figures are encouraging, but economists warn the real test for the public finances will come later in the year, as spending pressures and upcoming local elections put the government’s fiscal plans under the spotlight.
8.15am: Footsie off to a flying start
The FTSE 100 is off to a positive start, making up for some of yesterday's losses on the renewed US-Iran tensions. Shortly into the session, London's blue-chip index is up 29 points at 10,655.60, a gain of just over a quarter of a percent.
Leading the gainers are St James's Place PLC (LSE:STJ) and Burberry Group PLC (LSE:BRBY), with gains of 3.8% and 2.8% respectively. The Sage Group PLC (LSE:SGE) takes third place with a 1.7% rise.
Countering those gainers, SSE PLC (LSE:SSE) has shed 1.1% in early dealings, while BP PLC (LSE:BP.) is down 0.6% despite oil's gains.
Chemring Group (LSE:CHG) is down 4% after the defence and security technology company told shareholders its full-year outlook remains unchanged, despite a slower-than-expected start to the financial year caused by operational disruption at one of its US manufacturing sites.
7.45am: Retail sales perk up
Shoppers started the year in a confident mood, giving retailers a welcome lift.
The Office for National Statistics (ONS) said retail sales volumes jumped 1.8% in January 2026, the biggest monthly rise since May 2024. That follows a solid 0.4% increase in December, rounding off a positive start to the year.
Over the three months to January, sales nudged up 0.1% compared with the previous quarter. Volumes were 4.5% higher than a year ago and now sit level with their pre-pandemic position in February 2020.
The January bounce was driven by a pick-up in automotive fuel and firmer demand for non-food items. Commercial art galleries, computer and telecoms retailers and household goods stores all enjoyed stronger trade. That helped offset softer performances at supermarkets and department stores.
Online shopping also remained upbeat. Spending values rose 1.3% month-on-month and were up 14.7% year-on-year. Overall spending increased 1.6%. The share of sales made online dipped only slightly, from 28.3% to 28.2%, suggesting digital demand remains resilient even as shoppers return to the high street.
7.15am: FTSE set for brighter start
London’s blue-chip index is expected to claw back the majority of Thursday’s losses this morning. After retreating from recent record highs to close 59 points down at 10,627, futures suggest the FTSE 100 will open about 36 points higher.
Geopolitical tensions are back in focus amid reports that the US could be preparing for a strike on Iran. Brent crude is up 0.7% at $72.13 a barrel, a six-month high, while gold has added 0.6% to $5,026 an ounce as investors seek safety.
Wall Street weakened overnight, with the Dow Jones down 0.5% and the S&P 500 and Nasdaq both off 0.3%.
Asian markets are mostly softer this morning. Tokyo has fallen 1%, Hong Kong’s Hang Seng is down 0.6%, and Shanghai’s SSE Composite has dropped 1.3%.
South Korea’s Kospi is the outlier, rising 2.2% on strong demand for defence and shipbuilding stocks, hitting a fresh high.
In Australia, the ASX 200 closed only marginally lower.