London, Feb 20, 2026, 17:36 GMT — After-hours
Stocks in London finished Friday on a stronger note, with the FTSE 100 advancing 59.85 points, or 0.6%, to close at 10,686.89. That just barely clears Wednesday’s record finish of 10,686.18. Investors sorted through a slew of UK numbers and digested a U.S. Supreme Court decision scrapping President Donald Trump’s global tariffs. The mid-cap FTSE 250 gained 178.07 points, or 0.8%, landing at 23,751.56. Diageo, Antofagasta, and Burberry stood out among the top FTSE 100 gainers. BP and Associated British Foods slipped lower. Focus is shifting toward Monday’s U.S. factory orders, a key German business climate readout, and upcoming earnings from HSBC, Diageo, and Rolls-Royce next week. 1
These new highs are grabbing attention, as investors weigh if the UK’s recovery is gaining traction without sparking another inflation surge. “Retail sales provide further evidence that economic activity is picking up smartly in the new year as Budget uncertainty fades,” said Rob Wood, an analyst at Pantheon Macroeconomics. 2
The pound couldn’t catch a break, stuck near a one-month low around $1.3468 and on track for a roughly 1.3% loss this week. “I don’t think we read too much into one retail sales print,” said Dominic Bunning, head of G10 FX strategy at Nomura, while money markets put the odds of a 25-basis-point (0.25 percentage point) Bank of England rate cut in March at close to 80%. 3
Retail sales volumes climbed 1.8% in January from December, marking the biggest monthly jump since May 2024, according to official data. Compared to the same month last year, volumes increased 4.5%. The Office for National Statistics noted sales volumes were unchanged from February 2020, right before the pandemic. 4
ONS flagged robust sales in artwork and antiques, plus persistent demand from online jewellers, as retail volumes excluding petrol jumped 2.0% month-on-month. “The huge 2% m/m increase… excluding fuel in January suggests that consumers are opening their wallets again,” said Thomas Pugh, chief economist at RSM UK. He noted the data signals a stronger kickoff to 2026 after last year’s sluggish close. The BoE is widely seen cutting rates to 3.5% in March, according to Reuters. 5
Business surveys pointed up as well. The UK flash composite PMI, which tracks private-sector activity using survey data, edged higher to 53.9 for February compared with January’s 53.7. That’s despite private-sector employment falling for the 17th month in a row, S&P Global numbers showed, as reported by Investing.com. 6
Britain posted a record budget surplus of £30.4 billion in January, according to the ONS, thanks to stronger self-assessed income and capital gains tax receipts, while debt-interest payments dropped. The ONS put those tax receipts at £46.4 billion—£10.5 billion more than the figure a year ago. 7
An external shock hit with the tariff news. The U.S. Supreme Court, in a 6-3 decision, threw out Trump’s broad tariffs, ruling that the International Emergency Economic Powers Act doesn’t give the president that authority, Reuters reported. The justices didn’t clarify if or how earlier tariff payments might be returned. 8
Still, not everything looks rosy. According to Reuters, traders now put the odds of a BoE rate cut next month at 78%, even as strong UK manufacturing numbers and Friday’s retail sales have stoked some concern about renewed inflation. Geopolitical strains between Iran and the US remained on the radar. Stock-specific moves stood out: Aston Martin slid after flagging a steeper annual loss and revealing plans to license its name to the Aston Martin F1 Team. Anglo American gained ground, shrugging off a $3.7 billion loss from yet another diamonds write-down. 9
Diageo grabbed focus as the Financial Times reported that incoming CEO Dave Lewis is eyeing a sweeping executive shakeup. Citing sources, the report described Lewis’s push for “wholesale change,” potentially cutting management layers at the drinks giant. The company wouldn’t comment to Reuters on the report. 10
Next up on the UK political calendar: Chancellor Rachel Reeves is set for a fiscal update March 3, as the Office for Budget Responsibility rolls out its latest growth and borrowing projections. KPMG UK senior economist Dennis Tatarkov flagged the chancellor’s “already likely diminished” headroom—down by about 3 billion pounds—with weaker 2025 second-half growth in view. 11
