Share prices in London have closed mostly higher as investors reinforced their bets that the Bank of England would cut interest rates in March after unemployment rose, while the pound fell.
The FTSE 100 index closed up 82.48 points, or 0.8%, at 10,556.17, a new record. The FTSE 250 finished up 180.35 points, or 0.8%, at 23,555.82, and the AIM closed down 4.73 points, or 0.6%, at 806.61.
In European stocks on Tuesday, the CAC 40 in Paris closed up 0.5%, while the DAX 40 in Frankfurt finished up 0.8%.
The pound fell to $1.3531 on Tuesday afternoon from $1.3629 at the close of trading on Monday. The euro fell to $1.1830 from $1.1854. Against the yen, the dollar was trading higher at 153.61 yen against 153.44 yen.
The unemployment rate hit 5.2% in the three months ending in December, up from 5.1% in the three months ending in November. The data was above the consensus cited by FXStreet, which had forecast another reading of 5.1%.
The ONS estimated that the number of salaried employees in the UK fell by 121,000, or 0.4%, in the year to December 2025, and fell by 6,000 month-on-month.
Rob Wood, analyst at Pantheon Macroeconomics, said: “The rise in unemployment in December and the decline in average weekly earnings growth across the economy will attract attention and suggest a marked easing of inflationary pressures.
“Combined with the fact that payrolls continue to fall slightly, the (Monetary Policy Committee) doves have enough to cut rates in March rather than wait until April, so markets would do well to increase the probability of a cut in March.”
Deutsche Bank analyst Sanjay Raja said the data “does little to ease fears that the labor market remains weak.”
“How high will the unemployment rate go? Today's data suggests there may be a little more room to go before we reach the cyclical peak of the unemployment rate.
“The monthly unemployment rate already stands at 5.4%. HMRC data suggests more redundancies are coming. And almost all surveys point to limited hiring plans.
“This will put continued upward pressure on the unemployment rate. Simply put, the labor market remains stagnant.”
In response to renewed hopes of interest rate cuts, Barratt Redrow rose 3.1%. Other property stocks also performed well, with property investor Land Securities up 2.4% and housebuilder Persimmon up 1.1%.
Stocks in New York were mixed, after being closed on Monday for a long weekend. The Dow Jones Industrial Average rose marginally, the S&P 500 index fell 0.1% and the Nasdaq Composite fell 0.2%.
The 10-year U.S. Treasury yield was unchanged from Friday at 4.05%. The 30-year US Treasury yield fell from 4.70% to 4.68%.
In London, Antofagasta fell 5.7% as it reported revenue and operating profit below analyst expectations.
The London-based miner operating in Chile said pre-tax profits rose 53% to $3.16bn (£2.3bn) in 2025 from $2.07bn (£1.51bn) in 2024.
Revenue rose 30% to $8.62bn (£6.31bn) from $6.61bn (£4.84bn), although a level below Peel Hunt's expectations of £8.68bn (£6.36bn). Earnings before interest, tax, depreciation and amortization rose 52% to a “record” $5.2bn (£3.81bn) from $3.43bn (£2.51bn).
Subsidiaries' operating profit and share of total results from associates and joint ventures rose 64% to $3.43bn (£2.51bn) in 2025 from $2.08bn (£1.5bn) in 2024. It was slightly below the market consensus, according to Peel Hunt, of $3.45bn (£2.52bn) sterling).
Antofagasta recommended a final dividend of 48 cents per share by 2025, more than double the 23.5 cents a year ago. This brings the total payment for 2025 to 64.6 cents, more than double the 31.4 cents.
Peers Endeavor Mining, Anglo American and Fresnillo also fell 4.2%, 2.4% and 2.1% respectively.
On the FTSE 250 index, Raspberry Pi led the way with its shares up 36%.
Bloomberg News reported that the gains were boosted by a social media post that said artificial intelligence agents like OpenClaw could boost demand for the company's single-board computers. The post on X attracted 200,000 views.
A Raspberry Pi spokesperson told Bloomberg that “there is nothing from the company beyond what is already in the public domain.”
SSP Group shares rose 6.6% after UBS raised its rating to “buy.”
Applied Nutrition rose 6.2% as it raised its revenue forecast for the current financial year above market expectations, citing strong first-half performance.
The Merseyside-based wellness brand now forecasts revenue for the financial year ending July 31 of around £140m, above the market consensus of £133.5m. Revenue will increase 31% from £107.1 million in financial year 2025, when in turn it increased 24% from £86.2 million in financial year 2024.
The positive results are due to the company's “channel diversification across major UK health retailers, grocers and discounters” along with “accelerated demand from a number of… product launches” in the first half of the 2026 financial year, it said.
Among smaller caps, boohoo Group shares fell 6.7% as it confirmed it is preparing to raise £35 million in new capital and is in talks with its lenders to create additional liquidity.
The online fast fashion retailer trading as Debenhams said the capital will be used to pay down its debt and provide greater financial flexibility to carry out its recovery plan.
It is talking to its lending syndicate about improving covenant amendments due to its expected reduced leverage.
Boohoo said chief executive Dan Finley and directors Mahmud Kamani and Iain McDonald will participate in the capital raising at 20 pence per share. Total support from directors and institutional shareholders for the capital raising exceeds £24 million, boohoo said.
Brent crude oil fell to $67.17 a barrel Tuesday afternoon from $68.42 a barrel on Monday. Gold fell to $4,882.00 an ounce from $4,985.30.
The biggest risers on the FTSE 100 were Coca-Cola Europacific Partners, up 260.00 pence to 7,690.00 pence. Barratt Redrow, up 11.70p to 385.60p. 58.00p to 2111.00p.
The biggest fallers on the FTSE 100 were Endeavor Mining, down 176.00 pence to 4,510.00 pence. Antofagasta, with a fall of 129.00 pence to 3,617.00 p. Fresnillo, fell 80.00p to 3,734.00p.
On Wednesday's economic calendar, the UK will see CPI and PPI data at 7am GMT, French CPI later and US industrial production and building permits data in the afternoon.
Wednesday's corporate calendar includes full-year results from defense contractor BAE Systems and miner Glencore, among others.
Contributed by Alliance News
