London, Feb 18, 2026, 14:00 GMT — Regular session
London’s FTSE 100 pushed higher again Wednesday, rising about 1% and hovering near its all-time highs as softer inflation numbers fueled fresh rate-cut wagers. The blue-chip index touched 10,666.68 during the session, last quoted near 10,660, after a record 10,556.17 close the previous day. BAE Systems stood out among defence names, surging, while Glencore advanced on news of a $2 billion payout. Raspberry Pi, meanwhile, kept its brisk rally alive.
Why this matters now: Policymakers are getting some relief as inflation heads lower. The UK’s consumer prices index (CPI) increased by 3.0% in the year to January, a drop from December’s 3.4%, according to the latest data. That’s shoring up hopes that price pressures are starting to cool.
Equity prices tend to react to rate expectations—cheaper borrowing often boosts valuations while giving households and businesses some breathing room. The Bank of England held its Bank Rate at 3.75% in the last meeting, but it was a narrow call; four policymakers argued for a cut. That split keeps traders on edge with every new inflation figure.
AJ Bell’s Russ Mould said, “This increases the chances of an interest rate cut when the Bank of England meets next month,” noting that’s “typically good news for stocks and shares in general.” Antofagasta topped the FTSE 100 leaderboard at midday. Diageo, though, trailed. London South East
Sterling held its ground after tumbling Tuesday, with traders still eyeing a possible rate cut in March. “Services CPI was a little bit higher than expected,” said Chris Turner, ING’s global head of research, noting the pound saw “a little bit of reprieve” on that. Turner also pointed to next week’s by-election, calling it a political risk that could shake both sterling and gilts if the result turns against the government. Reuters
Midcaps were also on the rise. The FTSE 250 climbed 0.24% to 23,611.77 points in delayed midday trading, staying close to the upper end of its latest range.
Global equities found support from improved risk sentiment. Investors stepped back from the recent AI-driven selling, giving European stocks room to notch fresh highs. Oil prices also bounced following a stretch of declines. Later, eyes shift to the Federal Reserve’s January meeting minutes.
The easing narrative isn’t without its complications. Analysts at the National Institute of Economic and Social Research argue the newest figures line up with a downward move in inflation, projecting CPI will hit the BoE’s 2% goal in the first half of the year. Still, markets appear to have already absorbed much of the optimism, and a fresh bout of stubborn domestic prices could easily rattle that outlook.
UK traders are eyeing a batch of local data next, as retail sales figures and preliminary PMI business surveys approach on the calendar.
March 19 looms larger—that’s when the Bank of England releases its rate call and minutes, making it the key event traders are watching for UK rate-cut signals.
