The FTSE 100 is off to a roaring start in 2026, but is this just a fleeting moment of joy, or a sign of sustained economic strength?
Good morning, and welcome to today's live market update! The UK's leading index, the FTSE 100, began the new year with a bang, briefly touching an intraday high of 10,046.25p on Friday, January 3rd, 2026. While it later cooled off, the session still ended positively, closing at 9,951.14p, a 0.2% gain, fueled by strong performances from major players like Rolls-Royce and Fresnillo.
Chancellor Rachel Reeves took to X to express her optimism, calling the rally a "vote of confidence in Britain’s economy." But is this sentiment justified? Rebecca Maclean, investment director at Aberdeen Investments, believes the UK market has potential, expecting solid earnings growth in 2026. She also points out that the UK market remains relatively undervalued compared to others, potentially offering attractive returns. She suggests that investors might want to consider UK mid-caps, which lagged behind last year's rally.
But here's where it gets interesting: the focus is now shifting to corporate updates, especially from retailers, which will shed light on their performance during the crucial 'golden quarter' (the period including the holiday season).
Tesco and Sainsbury’s will provide insights into Christmas trading, while Next and Marks & Spencer will offer a view of the high street. Next and Sainsbury’s results are due on Tuesday, followed by Tesco, Marks and Spencer, and Greggs on Thursday.
Here’s a quick recap of some top stories from last week:
- FTSE 100 nearly hit 10,000 after an intraday high.
- Uber prices are expected to increase due to a VAT crackdown.
- The housing market ended 2025 on a softer note after a resilient year.
- A think tank warns that Labour is quietly impacting workers while pensioners benefit.
- The UK’s first high-speed railway, HS1, faced potential cancellation before the Channel Tunnel opened.
What do you think? Is the FTSE 100's strong start a genuine reflection of economic health, or are there underlying concerns? Share your thoughts in the comments!
