Must read: stocks hit fresh highs, UK GDP, Unilever

Global markets

The FTSE 100 is eking out modest gains to hit fresh record highs. The CAC 40, Stoxx 600, Euro Stoxx 50 have also hit record highs this morning. 

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The UK index is enjoying a boost from Schroders (LSE:SDR) which has surged by over 28% after agreeing to be acquired by US investment firm Nuveen for £9.9 billion ($13.5 billion). RELX (LSE:REL) is also up thanks to annual profit growth and a dividend lift. Commenting on the recent software sell-off, the company argued that AI will drive growth for “many years”. 

Meanwhile, on the FTSE 100, Unilever (LSE:ULVR) is under pressure following earnings. British Land Co (LSE:BLND) and Land Securities Group (LSE:LAND) are also languishing at the bottom of the index.   

US futures are pointing higher after a flat day on Wall Street as yesterday’s blockbuster jobs report reduced the chances of a near-term interest rate cut from the Federal Reserve. In January, US non-farm payrolls grew by 130,000, sharply outpacing analysts’ expectations.

UK GDP 

The UK economy grew by 0.1% in the fourth quarter of last year, according to the Office for National Statistics (ONS). On an annual basis, GDP rose by 1%, slightly below expectations. In December alone, UK GDP grew by 0.1%, while November’s reading was revised lower from 0.3% to 0.2%. However, across the whole of 2025, the UK economy grew by 1.3%, beating expectations for growth of 1.1% and up from 1.1% in 2024. 

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The UK economy’s modest growth in the final three months of last year was driven by expansion in the production sector (mostly manufacturing) with growth in electricity, gas, steam and air conditioning supply. Mining and quarrying and water supply also contributed positively. This was partially offset by a contraction in construction, while services made no contribution in either direction with 0% growth in Q4. 

More broadly, the UK economy grew at a lacklustre pace late last year, weighed down by a very weak construction industry and uncertainty in the lead up to the Budget in late November which hurt consumer and business sentiment, leading to lower spending and less hiring in the economy. The Bank of England recently downgraded its forecasts for 2026 UK GDP from 1.2% to 0.9%, suggesting the challenging backdrop shows no immediate signs of easing.

For the Bank of England, more focus will be placed on inflation and labour market data, and less on this GDP report, which is unlikely to move the dial in terms of the outlook for its rate-setting decisions. However, the tighter-than-expected vote split in its latest rate decision could pave the way for a cut in March.

Unilever 

Unilever reported full-year underlying operating profit of 10.1 billion euros (£8.8 billion), down 1.1% and slightly below expectations. The consumer goods giant said that it expects 2026 underlying sales growth to come in at the bottom end of the guided range of between 4% and 6%. On a more positive note, Unilever’s fourth-quarter underlying sales growth hit 4.2%, beating forecasts for 3.9% and it launched a 1.5 billion euro share buyback. 

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Emerging markets such as India and China outperformed, while growth slowed in North America and Europe. There is a lot of focus on how Unilever will perform this year following the spin-off of its ice cream business. 

Although Unilever achieved a robust set of quarterly earnings and is returning cash to shareholders, investors have failed to get enthused by today’s report, with a focus on its disappointing outlook sending shares into the red. This year is likely to be critical for Unilever as it attempts to demonstrate strength in its new life without its ice cream business.

However, the sales forecast is less than encouraging and suggests that it could be a bumpy road ahead, particularly in its more saturated developed markets such as the US and Europe where growth has slowed. Unilever is expected to make changes, including “targeted disposals” and “bolt-on deals” to focus on its core winning “power brands”. 

Although shares are down today, the stock has had a strong start to the year, gaining over 7.5% year-to-date but is up a more lacklustre 3% over the last year. Analysts remain largely positive though, with a consensus buy recommendation on the stock.