London, Feb 20, 2026, 21:50 GMT — Markets are done for the day.
- FTSE 100 finished up, following a global upswing sparked by a U.S. tariff decision
- UK numbers topped forecasts, so traders are still eyeing possible rate cuts.
- Defence stocks and a handful of selective earners took the lead; still, tariff worries and inflation risks haven’t faded.
The FTSE 100 added 0.6% to finish at 10,686.89 on Friday. Investors in London responded to a U.S. Supreme Court decision overturning President Donald Trump’s broad tariffs. Not long after, Trump unveiled a new across-the-board 10% tariff, this time relying on another law.
The index found its footing after a volatile stretch, notching a fresh intraday record at 10,745.76 before settling. The FTSE 250 added 0.7%. Defence stocks surged 6.7% for the week. Diageo climbed 3.9%, buoyed by talk of executive changes. Aston Martin dropped 1.4% after flagging a deeper annual loss. “A rare safe haven this year,” said IG’s Chris Beauchamp of the FTSE. Reuters
Trump weighed in, keeping uncertainty alive. He pointed to Section 122 of the 1974 Trade Act, which lets a president impose temporary tariffs for as long as 150 days, and said he’d tack on another 10% import tariff over current rates.
The UK government maintains it’s counting on Britain’s “privileged trading position” with the U.S. to hold, emphasizing that the bulk of bilateral trade falls under its own separate tariff arrangement. William Bain, who leads trade policy at the British Chambers of Commerce, remarked that the decision did “little to clear the murky waters for business.” Reuters
Retail sales volumes in January jumped 1.8% from the previous month, according to official data, marking a 4.5% increase year-on-year—the strongest annual rise since February 2022. The Office for National Statistics pointed to robust demand for artwork, antiques, and a lift from online jewellers. Stripping out fuel, sales climbed 2.0% on the month. “Consumers were opening their wallets again” as budget worries eased, RSM chief economist Thomas Pugh noted. Reuters
The S&P Global UK composite PMI ticked up to 53.9 in February, just above January’s 53.7, the survey showed. A reading above 50 signals growth. Manufacturing climbed to 52.0, an 18-month best, while services slipped a bit to 53.9. Finance minister Rachel Reeves is expected to announce a budget update on March 3. “Inflation stickiness is an issue that has improved but has not gone away,” J.P. Morgan’s Allan Monks said. Reuters
UK stocks got a jolt Thursday as the FTSE 100 slipped 0.5%. Rio Tinto tumbled 3.6% following weaker-than-expected annual results, and Centrica lost 5.1% after it flagged a profit warning for its energy trading unit and hit pause on its buyback.
Rates remain the sticking point. The tariff decision has reignited concerns over possible refunds and an expanding fiscal deficit in the U.S.—a combination that tends to send bond yields higher and pressure stock prices. “Whether the market reaction sticks is going to depend on the details,” said Nick Rees, head of macro research at Monex Europe, as traders tried to gauge the next policy move. Reuters
Monday’s open is set to depend on whether the tariff headlines calm down—or take another turn—over the weekend, along with the moves in U.S. yields and the dollar.
UK investors are zeroed in on one date: March 19, when the Bank of England is set to announce its next rate decision. The Bank Rate stands at 3.75% for now.
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