LONDON, Jan 22, 2026, 08:58 GMT — Regular session
- HSBC shares climbed roughly 1.4% in early London trading, staying close to their 52-week high
- After December inflation data and new forecasts from banks, traders adjusted their expectations for the Bank of England’s rate path
- Next up: BoE meeting on Feb. 5, followed by HSBC’s annual results on Feb. 25
Shares of HSBC Holdings Plc climbed 1.4% to 1,248.2 pence by 0837 GMT, touching 1,248.8 earlier—close to their 52-week high. Barclays jumped 2.2%, while Lloyds edged up 1.8% during the same period. (Google)
The reason this matters now comes down to rates. Bank shares usually track expectations about central bank policy, since those forecasts directly impact their profits.
Net interest income—the difference between what banks earn on loans and pay on deposits—can shift rapidly for lenders when traders change their outlook for the coming months.
Morgan Stanley has delayed its forecast for the Bank of England’s next rate cut, now expecting it in March rather than February following recent inflation figures. The firm predicts three quarter-point cuts throughout this year. The BoE’s upcoming meeting on Feb. 5 is widely tipped to hold rates steady at 3.75%. According to LSEG data, markets currently price in roughly 42 basis points of cuts by the end of 2026—about 0.42 percentage point. (Reuters)
UK consumer inflation edged up to 3.4% in December, ticking higher from 3.2% in November and surpassing the 3.3% forecast in a Reuters poll, the Office for National Statistics reported on Wednesday. “Although the uptick is larger than expected, for now it’s a speed-bump,” said Adam Deasy, an economist at PwC. (Reuters)
The broader sentiment lifted markets, too. Wall Street closed up after President Donald Trump indicated that a Greenland deal framework would halt planned tariffs, easing worries about a fresh trade clash with Europe. “What is the economic impact is whether we all start imposing tariffs on each other,” said Jason Pride, chief of investment strategy and research at Glenmede. (Reuters)
HSBC’s extensive presence in Asia means it remains closely linked to changes in UK-China ties. Britain and China are gearing up to restart a business dialogue during Prime Minister Keir Starmer’s anticipated trip to Beijing next week. HSBC is reportedly one of the British firms invited, according to three sources familiar with the effort, Reuters reported. (Reuters)
HSBC now faces the challenge of seeing if the rate story remains favorable as earnings season ramps up. While a big chunk of its profits comes from Hong Kong, the UK arm still holds the balance sheet steady—and keeps the bank vulnerable to shifts in Bank of England policy.
There’s a risk inflation drops quicker than policymakers anticipate, pushing yields down and hastening rate cuts — a scenario that can tighten interest margins. Geopolitical shocks might also dampen demand for financial stocks, which usually move with overall risk sentiment.
HSBC’s annual results for 2025, scheduled for release on Feb. 25, should shed light on the bank’s trajectory. Expectations around interest income, credit costs, and capital returns will probably shape the stock’s momentum into March. (Hsbc)
