London stocks edge higher as financials bounce back

• British banks led gains with NatWest up 4.3% and Barclays up 2.7%, recovering after UK lenders posted their biggest weekly fall since late-March 2025 due to AI disruption concerns
• Investors are pricing in a 25-basis-point interest rate cut next month despite inflation remaining above the Bank of England's 2% target, as tight monetary policy weighs on the economy
• Pinewood stock plunged 28% after Apax Partners withdrew its $792 million buyout bid citing challenging market conditions, while SkinBioTherapeutics fell 41.4% on a profit warning and investigation into its former CEO

Summary

Market Performance:

London's main equity indices rose on Monday, February 16, 2026, with the FTSE 100 gaining 0.41% to 10,488.79 points and the FTSE 250 climbing 0.36% to 23,513.26 points by 0925 GMT.

Key Drivers:

Financial stocks led the rally, recovering from last week's selloff triggered by concerns over AI disruption to traditional business models. NatWest surged 4.3% and Barclays added 2.7%, driving blue-chip gains. UK banking stocks had suffered their largest weekly decline since late-March 2025 before this rebound.

Economic Outlook:

Markets are anticipating critical economic data this week, including January consumer inflation, retail sales figures, and February manufacturing activity estimates. These releases will provide insight into the Bank of England's monetary policy trajectory. Investors are currently pricing in a 25-basis-point rate cut next month, despite inflation remaining above the BoE's 2% target, as tight monetary conditions strain the UK economy.

Corporate Developments:

• Pinewood plummeted 28%, leading mid-cap decliners after Apax Partners withdrew its $792 million buyout offer citing challenging market conditions
• SkinBioTherapeutics crashed 41.4% following a profit warning and disclosure that the company is investigating its former CEO for allegedly misrepresenting material financial information to the board and auditors

Sector Performance:

The materials sector declined, pressured by weakness in base and precious metals prices, ranking among the worst-performing sectors.

The market's focus remains on upcoming economic indicators that could shape near-term monetary policy decisions and UK economic outlook.