Key events
US slashes proposed tariffs on Italian pasta
Mark Sweney
The US government has slashed proposed tariffs on Italian pasta that would have almost doubled the cost of many brands for shoppers.
Donald Trump had threatened to impose tariffs as high as 92% on Italian pasta companies, after accusing 13 producers including Barilla, La Molisana and Pastificio Lucio Garofalo of selling their products at unfairly low prices.
Italy is estimated to be responsible for $770m-worth (approximately £570m) of annual pasta sales to the US. On Thursday, Italy’s government said the US Department of Commerce (DoC) had reviewed the proposed tariffs and reduced them to a range of between 2% and 14%.
Any additional duties on the Italian pasta makers will come on top of the 15% tariff that Trump has placed on most goods imported from the EU into the US.
The FTSE 100 has fallen back slightly from its 10,000 point milestone, now up 0.42% at 9,973 points.
But Alex Rudolph, an analyst at the trading platform IG, says the record earlier this morning is still a powerful signal for UK markets.
While the index’s recent outperformance may become choppier in 2026, it remains fundamentally supported by globally diversified earnings, strong cash generation and the prospect of a more accommodative Bank of England, suggesting the trend is sustainable even if gains moderate compared to 2025’s over 20% advance.
The FTSE 100’s new year rally has helped the pan-European Stoxx 600 index hit a fresh record high this morning.
The index, which tracks the biggest companies on the continent, rose by as much as 0.6% this morning to 596.94 points, hovering around the 600 point milestone.
Markets in Asia were also strong overnight, with shares in Taiwan, South Korea and Singapore hitting record highs. In India, the Nifty 50 index hit a fresh high of 26,340. Markets in China and Japan were closed.
Brighton’s historic Palace Pier up for sale
Mark Sweney
Brighton’s historic Palace Pier has been put up for sale after a decline in tourist numbers, a drop in profits and increase in costs in recent years.
The leisure group that owns the 126-year-old structure, which has appeared in famous films including Brighton Rock and Quadrophenia, said it hoped to find a new owner by the summer.
“This is more than just the sale of an asset,” said Anne Ackord, the chief executive of Brighton Pier Group (BPG).
It is an opportunity to become part of the next chapter in a remarkable story and shape the future of this national treasure.
The Grade II-listed pier, which opened in 1899 after three years of construction, was acquired by BPG for £18m in 2016.
UK factory sector grows at fastest pace in 15 months
The UK’s manufacturing sector grew at its fastest pace in 15 months in December, according to the latest reading from S&P Global’s purchasing managers’ index.
The index rose to 50.6 in December, up from 50.2 in November, but below an initial reading for December of 51.2.
Rob Dobson, director at S&P Global Market Intelligence, said factories had been helped by the end of uncertainty about the budget, as well as the carmaker Jaguar Land Rover reopening its facilities after a cyber-attack shutdown. He said:
The start of 2026 will show if growth can be sustained after these temporary boosts subside.
The base of the expansion needs to shift more towards rising demand and away from inventory building and backlog clearance. December’s interest rate cut will hopefully play some part in assisting this transition, encouraging manufacturers and their customers to increase spending and investment. Manufacturers remain uncertain on this score, with business optimism falling for the first time in three months in December.
The FTSE 100’s 10,000 milestone represents the fastest ever rise between 1,000 intervals ever for the blue-chip index, the investment broker AJ Bell has said.
Dan Coatsworth, head of markets at AJ Bell, says it has only been 171 days since the FTSE hit the 9,000 point mark.
Previously, the fastest jump in blocks of 1,000 happened when the FTSE 100 went from 5,000 to 6,000, which took 229 days in the late 90s.
The longest period was 6,206 days between hitting 6,000 in March 1998 and 7,000 in 2015. Admittedly, that period included a global financial crisis, so it was unusual times.”
The FTSE 100 also managed to beat the US blue-chip index last year, the S&P 500, as some investors stateside started to get nervous about the future of tech stocks. Coatsworth adds:
Investors have faced considerable uncertainty, and many have looked away from the US for opportunities. They’ve focused on cheaper areas of the market, of which the UK is one …
We’ve seen increased interest from foreign investors looking to diversify their holdings and the FTSE 100 has also shone during the more tumultuous periods thanks to its plethora of defensive-style companies …
Lots of people have criticised the UK for being an old economy market, full of boring companies in the banking and natural resources sector. Yes, it lacks the excitement of go-go-growth stocks omnipresent in the US, but boring can also be beautiful when it comes to investing. The UK is a rich hunting ground for dividends, and it is also full of companies that have slow but steady growth and which are under appreciated engines for wealth creation.”
FTSE 100 hits 10,000 mark for the first time
The FTSE 100 index has just hit a new high of 10,000 points for the first time, after a bumper year in the UK stock market.
Britain’s stock market increased in value by a fifth in 2025, its biggest annual gain since 2009. The miner Fresnillo was its best performer in 2025, with shares up by 450%, thanks to record prices for gold and silver.
Defence companies have also contributed to the FTSE 100’s rally.
About 75% of the FTSE 100’s earnings come from overseas, which means the index is a gauge of global economic prospects, rather than investor confidence in the health of the UK economy.
Stock market slightly higher in first trading day of the year
The UK’s blue chip FTSE 100 index is up slightly by 0.19% as the market opens for its first trading day of 2026. Miners are among the best performers across the index, with Fresnillo leading the pack, up 4%.
The mid-cap FTSE 250 index is also rising this morning, up 0.18%. Over in Europe, the Stoxx Europe 600 index has risen by 0.27%.
House prices were ‘resilient’ in 2025 despite softer end to the year, Nationwide says
House prices faltered slightly in December, but overall the UK’s property market was resilient in 2025, Nationwide says.
Robert Gardner said:
Despite the softer end to the year, the word that best describes the housing market in 2025 overall is ‘resilient’. Even though consumer sentiment was relatively subdued, with households reluctant to spend and mortgage rates around three times their post pandemic lows, mortgage approvals remained near pre-Covid levels.
Stamp duty changes that took effect at the beginning of April created volatility through the spring and summer. Activity spiked in March as purchasers brought forward transactions to avoid paying additional tax and this led to some softness in the following months. However, the underlying picture was little changed as demand held up well throughout.
Looking ahead to 2026, Nationwide now expects that annual house price growth will be in the range of 2% to 4%, as income growth is forecast to outpace house price growth, and economists expect a modest decline in interest rates.
Gardner adds the changes to property taxes announced in the government’s last budget are “unlikely” to have a significant impact on the market.
The high value council tax surcharge is not being introduced until April 2028 and will apply to less than 1% of properties in England and around 3% in London. The increase in taxes on income from properties may dampen buy-to-let activity further and hold down the supply of new rental properties coming onto the market, which could, in turn, maintain some upward pressure on private rental growth.”
Amy Reynolds, head of sales at the estate agency Antony Roberts in Richmond, said the expectation of continued lower mortgage rates should help restore buyer confidence this year.
There is more optimism and a feeling of relief now that the budget is over. We do not expect huge price rises and a racing market, more a return to the normal pre-budget market which has been on hiatus while everyone waited to see what the government would roll out.”
Introduction: House prices drop unexpectedly in December
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK house prices dropped unexpectedly by 0.4% in December, according to the latest figures from the lender Nationwide Building Society.
It found that house prices fell slightly in December compared with November, ending the year just 0.6% higher compared with the year before.
Economists polled by Reuters had forecast a 0.1% monthly rise, with an annual change of 1.2%.
Robert Gardner, Nationwide’s chief economist, said:
UK house prices ended 2025 on a softer note, with annual price growth slowing to 0.6%, from 1.8% in November, the slowest pace since April 2024.
The high base for comparison can partly explain the slowdown (annual price growth was a solid 4.7% in December 2024), although prices fell by 0.4% month on month, after taking account of seasonal effects.
Most regions across the UK reported modest house price growth in the final quarter of the year, with East Anglia the only region to post an annual decline of 0.8%. The strongest was Northern Ireland, where prices rose by 9.7% on annual basis.
The average price for a home in the UK was £273,077 in the final quarter of the year, Nationwide said. At the end of December, it was £271,068.
Elsewhere, the supermarket Lidl has said its revenue in the UK surpassed £1.1bn in the four weeks running up to Christmas Eve.
The supermarket, which has been rapidly expanding across the UK with new store openings, said it welcomed nearly 51 million customers through its doors, up 8% compared with the year prior. The busiest day for footfall was 23rd December, it said.
Its data suggests that shoppers bought more than 11,000 tonnes of seasonal produce in the week leading up to Christmas Eve, a 70% year-on-year increase, including an almost 40% rise in easy-peeler clementines alone.
Ryan McDonnell, chief executive at Lidl GB, said:
2025 was a record-breaking Christmas for Lidl – with more customers choosing to shop with us than ever before. By continuing to invest in low prices and champion British food, all without compromising on quality, we’ve seen loyalty soar. We remain the retailer that delivers the highest quality at the best price.
The agenda
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7.00am GMT: Nationwide house price index for 2025
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9.00am GMT: Eurozone manufacturing PMI
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9.30am GMT: UK manufacturing PMI
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2.45pm GMT: US manufacturing PMI
