The FTSE 100 closed down 0.6% at 8,712.53, while the FTSE 250 declined 0.8% to 20,707.79. The AIM All-Share slipped 0.7% to 719.43.

US President Donald Trump escalated trade tensions by threatening 25% tariffs on imported cars, alongside similar or higher duties on pharmaceuticals and semiconductors. This sent European auto stocks lower:

  • Volkswagen fell 2.9% in Frankfurt.
  • Mercedes-Benz lost 1.7%.
  • Stellantis dropped 1.6% in Paris.

US markets were also lower at the London close, with the Dow Jones down 0.3%, and the S&P 500 and Nasdaq both down 0.1%.

UK Inflation Surprises on the Upside

UK consumer price inflation accelerated more than expected last month, though analysts suggested the figures were not as severe as they first appeared.

The Office for National Statistics reported that annual consumer price inflation rose to 3.0% in January from 2.5% in December, surpassing the consensus forecast of 2.8%.

  • The increase was the sharpest since March 2024’s 3.2% rise.
  • Annual core inflation, which excludes energy, food, alcohol, and tobacco, climbed to 3.7% from 3.2%.
  • Services inflation accelerated to 5.0% from 4.4%.

Barclays analysts said the data supported expectations that the Bank of England would hold interest rates in March before resuming cuts in May.

Glencore Slumps After Weak Results, Listing Review

Glencore shares fell 7.3% following weak earnings and hints that the company may move its listing from London. CEO Gary Nagle stated that Glencore wants to ensure its shares trade on the “right exchange,” with the New York Stock Exchange emerging as the leading alternative.

  • The company swung to a $998 million pre-tax loss in 2024, compared to a $5.42 billion profit in 2023.
  • Revenue increased 6.0% to $230.94 billion from $217.83 billion.

BAE Systems Rises on Strong Cash Flow Outlook

BAE Systems ended 0.4% higher after raising its free cash flow guidance despite a weak start.

  • Pre-tax profit edged up 0.3% to £2.33 billion.
  • Revenue climbed 14% to £26.31 billion.
  • Underlying earnings before interest and tax (EBIT) rose 14% to £3.02 billion, slightly ahead of expectations.

HSBC Declines Despite Strong Results

HSBC closed down 0.3% despite reporting solid earnings.

  • Pre-tax profit rose 6.5% to $32.31 billion.
  • Diluted earnings per share increased 8.8% to $1.24.
  • Revenue declined 0.3% to $65.85 billion, while operating expenses grew 3.0% to $33.04 billion.

Analysts noted that while the results were positive, HSBC’s shares are now near a 20-year high, limiting immediate upside potential.

Antofagasta Gains on JPMorgan Upgrade

Antofagasta rose 0.8% after JPMorgan upgraded the miner to “overweight” from “underweight” and increased its December 2026 price target by 50% to 2,400p.

“Fewer operational and macro risks in 2025 make Antofagasta stand out due to its leading copper volume growth,” JPMorgan analysts noted.

Looking Ahead: Key Events on Thursday

Investors will focus on upcoming corporate earnings and economic data, including:

  • Centrica, Anglo American, and Lloyds Banking Group reporting full-year results.
  • China’s interest rate decision overnight.
  • Canadian PPI data at 13:30 GMT.
  • US weekly initial jobless claims at 13:30 GMT.

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