Category: Top Story

London equities opened modestly higher on Wednesday after fresh data showed UK inflation slowed in January, strengthening expectations that the Bank of England could deliver interest rate cuts in both March and June. Sterling also steadied, clawing back some losses after a sharp drop in the previous session.

By 0806 GMT, the benchmark FTSE 100 was up 0.4%. The pound edged 0.01% higher against the dollar to 1.3560, recovering following Tuesday’s slide triggered by weaker labour market figures.

Elsewhere in Europe, Germany’s DAX gained 0.5%, while France’s CAC 40 advanced 0.3%.

UK roundup

Official figures showed Britain’s annual inflation rate cooled to 3.0% in January from 3.4% in December, bolstering the case for a rate reduction at the Bank of England’s next policy meeting in March. December’s reading had ticked up from 3.2% in November, marking the first increase in five months.

On a monthly basis, consumer prices fell 0.5%, reversing a 0.4% rise in December. Core CPI, which excludes volatile food and energy costs, declined 0.6% month over month and eased to 3.1% year on year from 3.2% previously.

ING’s UK economist James Smith described the inflation data as “a bit of a mixed bag,” noting that while food inflation is down sharply, services inflation remains stickier. Smith added that “the real action will come in April” when headline and services inflation figures could make the Bank “more comfortable with the inflation outlook.”

Corporate focus

Shares of BAE Systems (LSE:BA.) were in focus after the defence group lifted its dividend following record order intake, driven by higher military spending across Europe and the United States.

The company proposed a final dividend of 22.8 pence, taking the full-year payout to 36.3 pence, a 10% increase. It also bought back 30 million shares during the year at a cost of £502 million.

Meanwhile, Glencore (LSE:GLEN) posted a 6% drop in full-year core earnings, as strength in copper prices failed to offset weaker profitability in its coal division. Adjusted EBITDA came in at $13.5 billion, while revenue rose 7% to $247.5 billion. Adjusted EBIT fell 14% to $6 billion, and earnings per share were $0.03.

Separately, YouGov Plc (LSE:YOU) confirmed the appointment of Ian Griffiths as permanent chair. Griffiths, who joined the board in September 2025, succeeds Deborah Davis, who had served in the role on an interim basis since February 2025.

European equity markets traded largely unchanged to marginally higher on Tuesday, as investors monitored geopolitical developments and prepared for a series of key economic releases from the United States.

Defense-related stocks mostly declined, reflecting a perceived easing of tensions surrounding Iran and Russia.

Sterling weakened against both the euro and the dollar after softer U.K. labor market figures reinforced expectations that the Bank of England could move to cut interest rates as early as March.

Official statistics showed the U.K. unemployment rate climbed to 5.2% in the fourth quarter, up from 5.1% in the previous period.

Average earnings growth, including bonuses, came in at 4.2% year-on-year, below forecasts of 4.6%. In January, the number of payroll employees fell by 11,000 month-on-month to 30.3 million.

In Germany, data from Destatis confirmed that consumer price inflation accelerated to 2.1% in January from 1.8% in December, driven by higher food and services costs.

The EU-harmonized inflation rate also rose to 2.1% from 2.0% the previous month, in line with the preliminary estimate released on January 30.

By mid-session, London’s FTSE 100 was up 0.3%, while Germany’s DAX edged 0.1% higher. France’s CAC 40 hovered around flat territory.

In corporate news, GSK (LSE:GSK) gained ground in London after announcing a £2 billion share repurchase program.

Mining group BHP (LSE:BHP) also moved higher after reporting earnings at the top end of analysts’ projections.

In contrast, copper producer Antofagasta (LSE:ANTO) fell despite posting record annual profits.

Swiss biopharmaceutical firm Basilea Pharmaceutica (TG:PK5) also declined after reporting lower full-year earnings.

European equity markets were uneven on Tuesday as investors digested another wave of corporate earnings, fresh UK labour figures and developments surrounding U.S.-Iran nuclear negotiations.

At 08:05 GMT, Germany’s DAX was down 0.1%. France’s CAC 40 added 0.2%, while London’s FTSE 100 advanced 0.3%.

Mining earnings take centre stage

The reporting season remains front and centre, with major mining groups drawing particular attention.

BHP Group (LSE:BHP) posted better-than-expected first-half underlying profit, helped by robust copper earnings. For the first time, copper overtook iron ore as the company’s largest profit contributor, as prices for the metal climbed amid demand linked to artificial intelligence.

Antofagasta (LSE:ANTO) also delivered record 2025 earnings, supported by firmer copper and by-product prices that lifted both profitability and operating cash flow. Annual revenue climbed 30%, reflecting stronger realised copper pricing and improved by-product contributions.

Results are due this week from Europe’s largest diversified miners — Rio Tinto (LSE:RIO), Glencore (LSE:GLEN) and Anglo American (LSE:AAL) — alongside Antofagasta, at a time when several key metals are trading near recent highs.

Outside the mining space, InterContinental Hotels (LSE:IHG) reported a 16% increase in adjusted earnings for 2025. However, revenue per available room in its Americas division fell 2% in the fourth quarter, marking the sharpest quarterly decline of the year as U.S. government and inbound international travel softened.

Spanish gas grid operator Enagas (BIT:1ENG) returned to profitability in 2025, exceeding its financial objectives. Asset disposals, a higher arbitration award linked to its Peruvian investment and disciplined cost management supported performance.

UK labour market shows signs of cooling

Data released Tuesday indicated further easing in UK labour conditions, potentially strengthening the case for additional monetary easing from the Bank of England.

The unemployment rate rose to 5.2% in the three months to December, up from 5.1% previously and the highest level since early 2021.

Meanwhile, annual growth in regular pay excluding bonuses slowed to 4.2% in the final three months of 2025 compared with a year earlier, down from 4.4% in the period to November.

“The lack of green shoots of recovery in the labor market and further fall in wage growth supports the idea that the Bank of England has at least a couple more interest rate cuts in its locker, with the chances of the next cut happening in March rather than April edging higher,” analysts at Capital Economics said in a note.

Later in the day, Germany’s ZEW economic sentiment survey is expected to show improving confidence in Europe’s largest economy.

Oil slips ahead of U.S.-Iran discussions

Crude prices edged lower as markets evaluated potential supply risks from Iran ahead of indirect talks with the United States in Geneva aimed at addressing their long-standing nuclear dispute.

Brent futures fell 0.7% to $68.15 per barrel, while U.S. West Texas Intermediate rose 0.6% to $63.12 per barrel. Monday’s U.S. public holiday meant there was no official settlement price.

While diplomatic efforts are under way, reports suggest the U.S. military is preparing contingency plans for possible extended operations involving Iran. Tehran has also begun military exercises in the Strait of Hormuz, a key global shipping lane for oil exports from Gulf producers.

The pound weakened on Tuesday after fresh UK labour data showed unemployment ticking higher and wage growth cooling more sharply than expected. Equity markets, however, opened firmer in London, while major European indices were mixed.

By 0811 GMT, the blue-chip FTSE 100 was up 0.3%, while sterling had fallen 0.5% against the dollar to 1.3573. Germany’s DAX slipped 0.06%, and France’s CAC 40 gained 0.2%.

UK labour market update

According to figures released by the Office for National Statistics, the UK unemployment rate rose to 5.2% in the three months to December, up from 5.1% previously and marking the highest reading since early 2021.

At the same time, wage pressures continued to ease. Annual growth in regular pay, excluding bonuses, slowed to 4.2% over the same period, down from 4.5% in the prior three-month window.

The combination of higher unemployment and moderating pay growth points to further softening in the labour market, potentially strengthening the case for additional interest rate cuts from the Bank of England at its upcoming meeting.

Corporate highlights

Antofagasta (LSE:ANTO) reported record EBITDA for 2025, supported by stronger copper and by-product pricing. Revenue increased 30% to $8.62 billion, while EBITDA rose 52% to $5.20 billion, lifting the margin to 60.3% from 51.8% a year earlier.

Profit before tax came in at $3.16 billion, and earnings per share including exceptional items climbed to 134.8 cents from 84.1 cents. Operating cash flow rose 30% to $4.25 billion. The board proposed a final dividend of 48.0 cents per share, taking total annual dividends to 64.6 cents, equivalent to a 50% payout of underlying earnings.

InterContinental Hotels Group (LSE:IHG) posted a 16% increase in adjusted EPS for 2025 to 501.3 cents, up from 432.4 cents a year earlier, and opened a record 443 hotels during the year.

However, its Americas division experienced pressure, with fourth-quarter revenue per available room declining 2%, marking the sharpest quarterly drop of the year amid softer US government and inbound international travel. The board approved a new $950 million share buyback for 2026 after completing a $900 million programme in 2025, and proposed a 10% higher final dividend of 125.9 cents per share, bringing the full-year total to 184.5 cents.

Coca-Cola Europacific Partners (LSE:CCEP) reported a 31% rise in operating profit for 2025 and announced a €1 billion share repurchase plan. Reported operating profit reached €2.79 billion, while comparable operating profit stood at €2.81 billion, up 5.4% on a comparable basis and 7.5% on a comparable, FX-neutral basis.

Annual revenue increased 2.3% to €20.90 billion, with adjusted comparable FX-neutral revenue growth of 2.8%, according to preliminary unaudited figures.