Macro update
UK consumer borrowing surged in November, growing by £2.08bn and reaching the fastest annual credit growth since May 2024, while mortgage approvals edged down. Data from the Bank of England (BoE) suggests households maintained solid demand in the run-up to the Budget.
FTSE 100 momentum continued into 2026, with the UK blue-chip index starting the year above 10,000 points on strong gains in mining and financial stocks. Early trading showed mixed performance around this milestone.
Business confidence weakened heading into 2026, with only 46 per cent of firms expecting sales growth and a rise in turnover pessimism amid rising tax and labour costs. Investment intentions remain subdued, particularly among SMEs.
Economists caution that UK unemployment could reach multi-year highs this year, with forecasts pointing to rates between 5 per cent and 6 per cent and private sector growth remaining weak. Think-tank forecasts highlighted risks of rising unemployment in 2026 linked to the collapse of low-productivity “zombie” firms and elevated operating costs, underscoring challenges for labour markets.
Broader macroeconomic forecasts signal continued weak domestic demand and modest gross domestic product (GDP) expansion in 2026, with the BoE likely to cut rates cautiously as inflation moderates. External analysis suggests a data-dependent outlook for monetary policy.
Oil price stems losses, having initially fallen on Monday morning as investors digest the US’ incursion into Venezuela and the arrest of President Maduro.
Nasdaq 100 bullish while above 25,086
The Nasdaq 100 is expected to be heading back up towards its 25,597 early January high, while its 2 January low at 25,087 underpins.
If slipped through, the area between the 22 September high and 22 October as well as 7 November lows at 24,782-to-24,604 may be revisited.
Minor resistance above 25,597 lies around the 26 December high at 25,717.
Short-term outlook:
Bullish while above the early January 25,087
Medium-term outlook:
Bullish while above the 17 December low at 24,468
Nasdaq 100 daily candlestick chart
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