Finance
UK's FTSE 100 touches record high as cooling inflation fuels rate‑cut bets; BAE shines
Published by Global Banking & Finance Review®
Posted on February 18, 2026
2 min readLast updated: February 18, 2026
Home > Finance > UK's FTSE 100 touches record high as cooling inflation fuels rate‑cut bets; BAE shines
Quick Summary
FTSE 100 reaches a record high as UK inflation cools, boosting rate-cut hopes. BAE Systems and Glencore lead stock gains.
FTSE 100 Hits Record High as Inflation Eases and Rate-Cut Bets Rise
Market Overview and Key Developments
Feb 18 (Reuters) - The UK's FTSE 100 touched a fresh peak on Wednesday as domestic inflation cooled last month, strengthening expectations of an interest rate cut as soon as March, while defence stocks drew comfort from BAE Systems' strong results.
Inflation Trends and Economic Impact
The blue-chip index FTSE 100 rose to an intraday record high, up 1% at 10,666.68 points as of 1105 GMT, while the FTSE 250 midcap index inched up 0.2% to trade at a four-year high.
Sector Performances: Defence and Energy
British inflation slowed to 3.0% in January, its lowest in nearly a year, helped by softer rises in transport, food and non-alcoholic drinks, according to the Office for National Statistics.
Company Highlights: BAE and Glencore
Sterling was little changed against the dollar as traders priced in almost an 80% chance of a March reduction in borrowing costs. A soft labour market report on Tuesday had pressured the currency.
Meanwhile, defence stocks rose 2.5%, with BAE Systems jumping 3.4% after reporting a better-than-expected jump in full-year operating profit, as global demand swelled its order backlog to a record 83.6 billion pounds ($113.40 billion).
Glencore, fresh from a failed takeover approach from bigger rival Rio Tinto, rose 2.7% after the miner reported slightly lower annual earnings and announced a $2 billion shareholder payout.
Energy stocks rose 1.3%, as oil prices rebounded from Tuesday's drop, as investors assessed progress in U.S.-Iran talks but remained cautious about the prospects of a final deal that could ease supply concerns. [O/R]
Shares in Raspberry Pi surged for a second day, last gaining 26%, fuelled by chatter that its products could benefit from low-cost artificial-intelligence projects.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Leroy Leo)
Key Takeaways
- •FTSE 100 hits a record high due to cooling inflation.
- •Expectations rise for a March interest rate cut.
- •BAE Systems reports strong profits, boosting defence stocks.
- •Glencore rises after announcing a $2 billion payout.
- •Energy stocks rebound as oil prices recover.
Frequently Asked Questions about UK's FTSE 100 touches record high as cooling inflation fuels rate‑cut bets; BAE shines
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, based on market capitalization.
2What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, leading to a decrease in purchasing power.
3What are interest rates?
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the principal amount.
4What are defence stocks?
Defence stocks are shares of companies that manufacture weapons, military equipment, or provide services to the defense industry.
5What is the significance of the London Stock Exchange?
The London Stock Exchange is one of the world's oldest and largest stock exchanges, serving as a platform for buying and selling shares of publicly traded companies.
