Banks bounce back after their worst week since April
The FTSE 100 has edged around 0.1% higher in early Monday trade, supported by financial stocks as risk appetite improves across European markets.
NatWest, Standard Chartered and Barclays have all gained more than 2%, recovering from their worst weekly performance since April 2025. Easing political concerns and renewed buying interest have helped lift the sector.
Miners drag as Asia takes a holiday
Rio Tinto, Glencore and Anglo American are weighing on the index as commodity prices soften in thin trading caused by the Lunar New Year holiday across much of Asia.
Defensive names are also on the back foot. National Grid and SSE are underperforming as the improvement in risk appetite encourages investors to rotate away from utilities and into more cyclical areas of the market.
Sterling holds steady as gilt yields edge lower
The British pound is trading in a narrow range between $1.36 and $1.37. A supportive US inflation reading has taken some of the heat out of the US dollar, but sterling has yet to capitalise on the move.
Gilt yields have edged lower in line with their continental counterparts. Markets are now pricing around a 72% chance of a Bank of England (BoE) rate cut in March, with a move by April close to fully priced following cautious comments from policymaker Catherine Mann.
Inflation and wages data in focus this week
January consumer price index (CPI) is expected to ease to 3%, which would represent a step in the right direction after months of sticky readings. Average earnings growth is forecast to slow to 4.6%.
The combination of cooling inflation and moderating wages would strengthen the case for an earlier rate cut. Rate-sensitive sectors including banks, housebuilders and real estate investment trusts tend to react quickly to shifts in expectations.
Housing market steadies as supply hits an 11-year high
Rightmove’s latest data shows average asking prices were broadly flat in February at £368,019. Housing inventory has hit an 11-year high, keeping conditions firmly in the buyer’s camp.
More choice and less urgency should continue to cap price growth, at least until rate cuts feed through to mortgage affordability. The housebuilders in the FTSE have been tracking rate cut expectations closely. You can keep up to date with UK market movements on our trading platform.
Corporate news: takeovers, pubs and private equity
Zurich and Beazleyhave extended their takeover deadline to 4 March. Pinewood Technologies has reiterated its guidance after a bid withdrawal, while CVC has committed $1.1 billion to M&G’s private equity secondary fund.
The UK pub sector is coming under renewed scrutiny. Reports suggest Greene King is reviewing costs, Stonegate is seeking efficiencies and Brewdog has hired advisers to explore a potential sale amid rising taxes and weaker trading conditions.