London, Jan 23, 2026, 10:57 GMT — Regular session
Britain’s FTSE 100 slipped on Friday, surrendering early gains after a streak of solid finishes as investors balanced stronger UK data against hints the Bank of England could hold off on rate cuts. The blue-chip index dropped 0.13% to 10,136.43, with the mid-cap FTSE 250 down 0.42% at 23,271.99.
The numbers carried weight, arriving just as markets wrestle with how fast the BoE might ease policy without sparking inflation again. UK stocks may seem sheltered—the FTSE 100 is heavy on global earners—but the interest rate narrative still seeps into banks, retailers, and housebuilders.
Retail sales delivered an early surprise. December’s volumes climbed 0.4%, according to the Office for National Statistics, defying predictions of a 0.1% drop and driven by online purchases. Neil Birrell, an investment chief at Premier Miton, noted it shows consumers aren’t giving up. “The budget was tough, but people’s worst fears weren’t met,” he said. Reuters
Then the latest numbers came in. The S&P Global UK Composite PMI, which tracks business activity monthly with readings above 50 indicating expansion, surged to 53.9 from 51.4—its best level since April 2024, Reuters reported. “UK businesses kicked up a gear in January,” said Chris Williamson, S&P Global’s chief business economist, even as the report noted rising inflationary pressures and softer hiring. Reuters
BoE policymaker Megan Greene stirred fresh doubts about near-term easing, expressing ongoing worries over wage growth and inflation expectations. She suggested the UK may need to roll out rate cuts more cautiously than the Federal Reserve. “I will be watching household and business inflation expectations over the next few months,” Greene said in a speech text released Friday. Reuters
Defence contractor Babcock dipped around 1.2% after announcing CEO David Lockwood will retire by the end of 2026. Harry Holt, who heads the nuclear division and is a former Rolls-Royce executive, will take over. Lockwood said, “It has been my privilege to lead Babcock, through a period that has seen the COVID pandemic.” The company also reaffirmed its confidence in hitting its fiscal 2026 growth targets. Reuters
On the mid-cap front, C&C Group tumbled 9.6% following a downgrade to its outlook. The drinks maker now forecasts adjusted operating profit for fiscal 2026 between 70 million and 73 million euros. The company cited softer sales in Ireland, disruptions from a UK systems rollout, and persistent distribution contract challenges.
Record went against the grain, pushing higher. The currency and asset manager reported assets under management hitting a new peak of $115.9 billion in Q3. Its shares climbed 3.04% to 55.64 pence in early London trading. “At $115.9bn, AUM ended another quarter at the highest level we have ever reported,” CEO Jan Witte said. London South East
Outside the UK, nerves remained frayed. Europe’s STOXX 600 slipped 0.1% by mid-morning, Reuters reported, as investors wrestled with lingering jitters from a Greenland-related trade spat — despite Washington dialing back its tariff threats. “We’ve seen a general increase in uncertainty this year,” Morningstar strategist Michael Field noted. Reuters
Yet the same data boosting UK sentiment today could backfire. Robust demand and persistent wage growth fuel inflation worries, turning “good news” into a case for higher rates — a headache for pricey sectors and households already tightening their belts on bills.
UK investors now turn to the Bank of England’s decision on Feb. 5, when it will also release its Monetary Policy Report. The Bank Rate sits at 3.75% ahead of the announcement.
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