Finance
UK's FTSE 100 rises on banking gains as investors eye US Fed decision
Published by Global Banking and Finance Review
Posted on January 27, 2026
2 min readLast updated: January 27, 2026
Quick Summary
FTSE 100 rises on banking gains as investors await US Fed's rate decision. Key market shifts include a rise in bank index and decline in mining shares.
UK's FTSE 100 rises on banking gains as investors eye US Fed decision
Market Overview and Economic Factors
Jan 27 (Reuters) - London's FTSE 100 gained on Tuesday, led by advances in heavyweight banking stocks, as investors geared up for a slew of corporate earnings and the U.S. Federal Reserve's rate decision later this week.
Banking Sector Performance
The bank index was up 2.2%, climbing to its highest level since May 2008, with HSBC Holdings gaining 2.9% and NatWest Group and Lion Finance rising over 2% each.
Impact of US Fed Meeting
The blue‑chip FTSE 100 was up 0.6% at 11:19 GMT, while the more UK-focused FTSE 250 was little changed.
Retail Price Trends
Mining shares retreated from recent highs, with the precious metal index and industrial metal miners falling 2.2% and 0.7%, respectively.
Meanwhile, Prime Minister Keir Starmer will fly to China on Tuesday evening in the first visit by a British leader to the Asian country in eight years, seeking to mend ties with the world's second-largest economy and reduce Britain's dependence on an increasingly unpredictable U.S.
Trade concerns persist after U.S. President Donald Trump's recent threats to hike tariffs on South Korean imports, prompting investors to look towards upcoming corporate earnings for clearer signals on business conditions.
Also on investors' minds is the Fed's policy meeting, due to begin on Tuesday and end with a policy update on Wednesday, with most investors expecting the U.S. central bank to hold interest rates steady.
Separately, all but two economists polled by Reuters still expect the Bank of England to cut its interest rate to 3.50% in February.
Meanwhile, data showed prices at British retailers rose at their fastest pace since February 2024 this month, led by a pick-up in food, furniture, health and beauty product costs.
Among notable movers, shares of Dr. Martens fell 12% to the bottom of the midcap index as the bootmaker forecast broadly flat annual revenue growth after its third-quarter sales dipped.
(Reporting by Tharuniyaa Lakshmi in Bengaluru)
Key Takeaways
- •FTSE 100 rises on banking stock gains.
- •Investors anticipate US Fed's rate decision.
- •Bank index reaches highest level since 2008.
- •Mining shares decline amid market shifts.
- •UK retail prices rise at fastest pace since 2024.
Frequently Asked Questions about UK's FTSE 100 rises on banking gains as investors eye US Fed decision
1What is the FTSE 100?
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, reflecting the performance of the UK stock market.
2What are interest rates?
Interest rates are the cost of borrowing money, expressed as a percentage of the total amount borrowed. They influence economic activity by affecting consumer spending and investment.
3What is corporate earnings?
Corporate earnings refer to the profits that a company generates during a specific period, often reported quarterly or annually, which can impact stock prices and market performance.
4What is the role of the US Federal Reserve?
The US Federal Reserve is the central bank of the United States, responsible for setting monetary policy, regulating banks, and maintaining financial stability.
5What are retail price trends?
Retail price trends indicate the changes in prices of goods sold in retail stores over time, reflecting inflation and consumer demand in the economy.
