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The UK economy presented a mixed picture in February 2026. Retail spending grew in January with grocery inflation falling to a nine-month low, though the broader economy struggled for growth amid concerns that pay rises could pressure inflation. The Bank of England held its main interest rate steady at 3.75% following a close vote, while indicating future rate cuts were expected. Government borrowing costs rose, and reports noted political concerns about Prime Minister Keir Starmer's future alongside his remarks on the cost of living.
Major corporate developments included HSBC reporting higher-than-expected profits, reaching a record share price, and allocating its largest bonus pool in over a decade. BP suspended its share buyback program. In contrast, the UK space startup Orbex collapsed after failed takeover talks, and a £1 billion sale of a UK accounting firm fell through. Other domestic issues included criticism of poor building standards, increased insurance payouts from storms, regulatory changes for lenders and water companies, and the planned introduction of self-driving taxis in London.
Internationally, new US tariffs directly impacted the UK, with Aston Martin cutting 20% of its staff due to increased costs of selling cars in the US. The UK government warned that retaliation with its own tariffs was possible, stating 'nothing is off the table,' while the US trade representative stated it would not back out of tariff agreements. In major corporate deals, US investment manager Nuveen agreed to acquire UK-based Schroders in a £9.9 billion deal, with Schroders' boss having reassured the UK Treasury beforehand.
Mining giant Rio Tinto ended merger talks with rival Glencore, a deal that would have created the world's largest mining company, opting instead to focus on its own growth strategy in copper. Separately, China and the UK took steps to deepen financial ties, with China's central bank authorizing the Bank of China's London branch for yuan clearing and regulators meeting to discuss increasing investment flows. Chinese toy company Pop Mart also announced London as its European headquarters.
7 topics | 127 sources
The Bank of England decided to keep its main interest rate at 3.75%. The vote by the central bank's policymakers was very close. A Bank of England official, Catherine Mann, said the UK's minimum wage policy is raising youth unemployment. A separate survey showed markets expect UK interest rates to fall to 3.0% by early 2027.
UK Prime Minister Keir Starmer is facing political pressure amid rising government borrowing costs and cost of living concerns. Starmer has made remarks about the cost of living, thanked his cabinet for support, and stated he will review student loan fairness. The combination of economic challenges and policy reviews creates a complex political environment for the new government.
Several major UK companies are making significant financial decisions. BP has suspended its share buyback program, while HSBC has built a large debt business. Separately, a UK space startup called Orbex has collapsed after takeover talks failed, and a private equity group's £1 billion sale of a UK accounting firm has also fallen through. In other business news, UK wealth management firms saw their share prices drop due to concerns about competition from artificial intelligence. Meanwhile, a 25-year-old founder has raised $220 million for a secretive UK-based AI chip startup.
Several different domestic issues are being reported on in the UK. These include criticism of poor building standards affecting housing, a rise in insurance payouts due to recent storms and flooding, and regulatory changes for 'buy now, pay later' lenders and water company bonuses. Other unrelated stories cover employers installing beehives for workplace wellbeing, the planned introduction of self-driving taxis in London, and a list of the country's top taxpayers, which includes celebrities Harry Styles and Anthony Joshua. Separately, the bank HSBC reported higher-than-expected profits.
HSBC, the British banking giant, announced its annual financial results. The bank's profit beat expectations, and its shares reached a record high as it accelerated cost-saving plans and raised key financial targets. Alongside these results, HSBC said it will share a $3.9 billion bonus pool among its bankers. This is the largest bonus pot the bank has set aside in over ten years, with a focus on rewarding its top performers.
14 topics | 195 sources
Feb 25
US tariffs lead to job cuts at Aston Martin and trade tensions with UK and EUThe US has imposed new tariffs, which are taxes on imported goods. This has directly impacted the UK luxury car company Aston Martin, which is cutting 20% of its staff because the tariffs make its cars more expensive to sell in the US. In response, the UK government has warned it might retaliate with its own tariffs, saying 'nothing is off the table.' The European Union is also seeking clarity on its trade deals with the US. Trump's trade representative has stated the US will not back out of its tariff agreements with the UK and others.
Feb 13
US investment firm Nuveen agrees to buy UK asset manager Schroders for £9.9 billionNuveen, a US investment manager, has agreed to buy the UK-based asset management firm Schroders in a deal worth £9.9 billion (about $13.5 billion). The boss of Schroders reportedly reassured the UK Treasury about the takeover ahead of the announcement.