Investing.com — British stocks extended their decline on Thursday as the pound weakened against the dollar, UK retailers released trading updates, and broader European markets traded mixed.
The blue-chip index fell 0.1% and the British pound fell 0.2% against the dollar to 1.3430.
The DAX index in Germany was flat, and the CAC 40 in France rose 0.1%.
UK round up
UK businesses report slight drop in price and wage growth expectations
UK businesses reported a modest decrease in their own-price growth and wage expectations in December 2025, according to the Bank of England’s Decision Maker Panel survey released Thursday.
The survey, which gathered responses from 2,062 Chief Financial Officers across small, medium and large UK businesses, revealed that realized annual own-price growth declined by 0.1 percentage points to 3.7% in the three months to December.
This latest data provides insight into pricing trends among UK companies as the Bank of England continues to monitor inflation indicators across the economy.
Bank of America forecasts pound may struggle despite strong start
The British pound may face challenges maintaining its recent gains despite a strong start to 2026, according to Bank of America’s latest outlook which runs counter to market consensus.
Sterling has posted significant appreciation against the US dollar and Japanese yen following the November 26 Budget, as markets continue to remove event risk premium and UK economic indicators show improvement amid decreasing uncertainty.
The currency pair has now returned to pre-Budget levels and currently trades above key support at the 200-day moving average of 0.8636. Bank of America projects this pair will move lower in the months ahead, with a forecast of 0.86 by the end of the first quarter.
Associated British Foods shares fall on profit warning
shares plunged 14% on Thursday after the company warned its annual profit would fall below last year’s levels.
The owner of Primark fashion chain cited softer trading in continental Europe and muted demand across parts of its U.S. food portfolio as key factors behind the downgrade.
The company has reversed its earlier forecast for earnings growth in 2026, now expecting both group adjusted operating profit and earnings per share to fall short of last year’s performance.
Central Asia Metals exceeds Q4 copper production expectations
reported Thursday that its fourth-quarter copper production surpassed expectations, with the company also releasing its first production guidance for 2026.
The mining company’s Kounrad operation produced 3.48 thousand tonnes of copper in the fourth quarter, which was 9% higher than anticipated. This strong quarterly performance helped bring the full-year 2025 copper production to 13.3 thousand tonnes.
The annual production figure falls within Central Asia Metals’ previously established guidance range of 13-14 thousand tonnes for 2025.
slip after warning on Q4 trading, chemicals losses
Shell shares slipped on Thursday after the energy group warned that weaker fourth-quarter trading and losses in its chemicals business would impact earnings. The company also narrowed its guidance for liquefied natural gas (LNG) production.
The London-based energy giant’s shares fell 3.5%.
Shell stated that trading results for the quarter would be notably below those seen in the previous three months. Oil trading forms a major component of Shell’s trading operations, alongside other refined products such as diesel.
The company’s chemicals business is facing losses that will further pressure quarterly earnings, according to the update provided on Thursday.
Greggs shares fall as flat profit outlook overshadows solid sales
shares dropped more than 6% on Thursday after the British food retailer forecast flat profit for 2026 despite reporting solid sales growth for the final quarter of 2025.
The company posted a 7.4% increase in total sales for the fourth quarter, while company-managed shop like-for-like (LFL) sales rose by 2.9%.
Despite these positive sales figures, Greggs warned that profits would remain flat this year, citing subdued consumer confidence as a key factor. According to Jefferies, this outlook suggests approximately 5% downside to current consensus estimates.
Tesco raises profit outlook after strong Christmas trading
Meanwhile, , the UK’s largest grocer, raised its profit outlook following stronger Christmas trading.
The company now expects full-year 2025-26 group adjusted operating profit to come in at the upper end of its £2.9 billion to £3.1 billion guidance range.
Tesco reported higher sales across most of its businesses during the third quarter and Christmas period.
Marks and Spencer shares climb after strong Christmas trading
stock rose on Thursday after the British retailer reported strong Christmas trading results, with its Food division outperforming the market.
The company reported total group sales increased by 24.2% to £4.99 billion in the 13 weeks to December 27. This growth was significantly boosted by the consolidation of Ocado Retail. When excluding Ocado, group sales still showed positive momentum with a 3.3% increase.
While the Food segment performed well, the retailer experienced a slight decline in its Fashion, Home & Beauty division during the holiday period.
