FTSE 100 Slips as Pound Softens and UK Retailers Deliver a Mixed Set of Updates

Key Moments

Early Trade: UK Equities and Currency Weaken

British equities extended their recent losses at the start of Thursday’s session, while the pound slipped against the dollar. UK retailers were in focus as they released fresh trading statements, and major European benchmarks showed a mixed pattern.

By 0830 GMT, the FTSE 100 had declined 0.3%. At the same time, the GBP/USD currency pair was down 0.1%, with the pound trading at 1.34 against the dollar.

Across Europe, the DAX index in Germany was up 0.3%, whereas France’s CAC 40 index was down 0.1%.

UK Market Snapshot

Shell Outlines Q4 2025 Operational Guidance

Shell PLC (AS:SHEL) issued an operational update for the fourth quarter of 2025, ahead of its full results release scheduled for February 5, 2026.

For the period, the company projects LNG liquefaction volumes in a range of 7.5 million to 7.9 million tonnes, compared with 7.3 million tonnes in the third quarter. Output in the Integrated Gas division is expected to be between 930 and 970 thousand barrels of oil equivalent per day (kboe/d).

Associated British Foods Hit by Profit Warning

Shares in Associated British Foods PLC (LON:ABF) sold off sharply in early trading after the group signaled that annual profits would undershoot last year’s outcome.

The owner of the Primark clothing brand pointed to weaker trading conditions in continental Europe and subdued demand in parts of its U.S. food operations as the main reasons for the downgrade.

By 08:16 GMT, the stock was down 11% as investors reacted to the revised guidance.

The company withdrew its previous forecast for earnings growth in 2026 and now anticipates that both group adjusted operating profit and earnings per share will be below the prior year’s levels.

Greggs Delivers Q4 Sales Growth but Misses Internal Target

Greggs PLC (LON:GRG) reported improved trading in the fourth quarter, with like-for-like sales growth accelerating to +2.9% from +1.5% in the third quarter, according to a trading statement released Thursday.

The bakery chain also reported market share gains over the period, despite ongoing pressure from weak consumer confidence. Total sales in the quarter increased by 7.4%, up from 6.1% in the third quarter and 6.9% in the first half of 2025.

Management had anticipated a better performance in the final quarter, helped by the comparison with tougher conditions earlier in the year, including unfavorable weather in spring and summer and softer consumer trends in the fourth quarter of 2024. Nonetheless, the reported growth rate was below management’s guidance of roughly 4%.

Despite missing that internal target, the Board still expects profit before tax for full-year 2025 to align with prior expectations, which analysts have estimated at around £173 million.

Tesco Lifts Guidance on Strong Holiday Season

Tesco PLC (LON:TSCO), the UK’s largest supermarket operator, raised its profit outlook following a strong performance over the Christmas period.

The retailer now anticipates full-year 2025-26 group adjusted operating profit will be at the top end of its previously communicated guidance range of £2.9 billion to £3.1 billion.

Tesco reported increased sales across most of its businesses during the third quarter and the key Christmas trading window.

Marks & Spencer Benefits from Robust Food Sales

Marks and Spencer Group PLC (LON:MKS) reported a record number of customers visiting its stores during the Christmas period, underlining the resilience of its franchise despite a challenging consumer environment.

For the 13 weeks to December 27, 2025, group sales rose 24.2% to £4.99 billion. Excluding Ocado Retail, which has been consolidated since April 6, 2025, group sales increased by 3.3%.

The improvement was driven primarily by strong performance in the food division, which helped offset broader consumer headwinds.