UK stock markets ended the week on a positive note, buoyed by the US Supreme Court’s ruling against former President Donald Trump’s tariffs, expectations of a Bank of England rate cut in March, and easing concerns over AI disruption. The FTSE 100 closed up 0.5% after reaching a record intraday high of 10,745.76 points, marking its strongest weekly gain since mid-December, while the domestically focused FTSE 250 climbed 0.7% to finish the week higher.
Investors welcomed the Supreme Court’s decision, which struck down Trump’s sweeping tariffs, although the UK maintains that its preferential trading relationship with the US remains intact. Geopolitical developments in the Middle East, along with growing prospects for defence cooperation in Europe, helped UK defence stocks rise 6.7% over the week.
On corporate earnings, Aston Martin shares fell 1.4% after the luxury carmaker warned of a larger annual loss and revealed plans to sell the rights to use its name on the F1 Team to support its finances. The broader auto sector also declined 1.4%, reflecting wider challenges in the industry. Anglo American reported a $3.7 billion loss due to further write-downs in its diamond business, though its shares rose 1% in line with higher base and precious metal prices.
Economic data this week offered a mixed picture. Inflation appeared to be approaching the Bank of England’s 2% target, while manufacturing activity and retail sales numbers signaled the possibility of renewed price pressures. Markets currently assign a 78% probability that the central bank will cut interest rates by 25 basis points next month to support the labour market.
Chris Beauchamp, chief market analyst at IG Group, noted that the FTSE has become a safe haven this year, attracting investors away from overheated US tech stocks due to its attractive valuations and steady momentum. Meanwhile, concerns about AI disruption, which had unsettled global markets earlier, appeared to ease temporarily.
Geopolitical tensions remain a factor, particularly after former President Trump warned Iran about potential consequences if no deal is reached over its nuclear program. Among other movers, Diageo shares rose 3.9% following reports that new CEO Dave Lewis plans a significant shake-up of his executive team.
