The Morning Bull - UK Market Morning Update Thursday, 22 Oct 2026
UK markets are set for a cautious, inflation-focused open after hotter price data reset rate expectations. The mood leans defensive as investors digest stronger domestic cost pressures and what that might mean for the Bank of England.
Headline CPI is at 3.5% for September with core inflation at 2.8%, a six-month high that tops forecasts. Factory gate prices are up 4.6% year on year and 0.8% month on month, keeping the near-term inflation narrative firmly alive.
Higher core prices and producer costs point to stickier domestic inflation, which can keep gilt yields under upward pressure and lift borrowing costs for households and companies. That combination complicates earnings planning for rate-sensitive areas and squeezes valuation support where financing needs are heavy.
The open question is how the Bank of England weighs this firmer inflation backdrop against already soft business sentiment and upcoming UK confidence data. Any hint on whether policy leans more toward growth support or inflation control could quickly test today's cautious starting point.
Stocks to Watch Before the Opening Bell
Quilter (QLT)
Quilter reports a 30% rise in core net inflows in Q3 to £2.9b, with assets under management and administration at £160.5b. Platform net inflows are 25% higher year on year and adviser productivity is 9% stronger. Watch how this intake of new client money interacts with today's higher yield backdrop for fee growth and retention.
SEGRO (SGRO)
SEGRO's update shows £70m of new headline rent contracted year to date, with occupancy at 94.7% and customer retention at 80%. Management reports an average 43% uplift on UK rent reviews and is working on a UK big box joint venture that is expected to raise about £500m in net proceeds, alongside a recommended Prologis takeover plan.
GSK (GSK)
GSK gains worldwide rights outside China and parts of Asia to HUTCHMED's HMPL-A830 cancer therapy, with upfront, milestone and royalty payments tied to progress. The group also highlights five year real world data on HIV treatment Cabenuva, where 77% of patients in the OPERA study stayed on therapy with sustained viral suppression.
Top Movers
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Ashtead Technology Holdings (LSE:AT.)surged 14.72% after traders focused on its exposure to subsea services and equipment demand.
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Watches of Switzerland Group (LSE:WOSG)climbed 5.31% as RBC reiterated its sector perform rating and 800p price target.
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Entain (LSE:ENT)rose 4.18% with buyers responding to interest in AI driven opportunities across betting and gaming.
Top Losers
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Halfords Group (LSE:HFD)fell 8.63% as investors reacted to heavier second half investment plans, despite maintained profit guidance.
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Aberdeen Group (LSE:ABDN)declined 4.09% after the Q3 update on higher assets, inflows, and reaffirmed 2026 financial targets.
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3i Group (LSE:III)declined 3.93%.
On The Radar
UK investors face a tight cluster of domestic earnings and data, with fresh reads on business sentiment, retail demand and credit conditions landing alongside major central bank meetings abroad.
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BarclaysThu 22 Oct. Q3 results will shine a light on net interest income and provisions in the context of UK CPI at 3.5% and higher gilt yields, which matter for funding costs and returns on the loan book.
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J SainsburyThu 22 Oct. First half numbers put like for like sales and profit margins under the microscope as households juggle 3.5% inflation and 3.7% total pay growth, a mix that shapes grocery volumes and pricing power.
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CBI Business Optimism IndexThu 22 Oct. The survey previously printed at 36 and a weaker Q4 reading than the forecast 38 would underline the squeeze from higher producer prices on UK manufacturing investment appetite.
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UK Retail SalesFri 23 Oct. September volumes carry a consensus of a 0.1% monthly decline and 1% annual rise, so any upside would suggest consumers are absorbing 3.7% wage growth without sharply cutting discretionary spending.
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BoE Consumer Credit and Mortgage ApprovalsThu 29 Oct. Forecasts look for £1.6b of new consumer borrowing and 57,000 mortgage approvals, with softer prints likely to flag more cautious households and extra pressure on UK lenders and housebuilders.
Sector & Industry Watch
Energy: Oil strength offsets UK tax pressure
Energy has held firm over the past week as Brent crude trades above $110 and the UK government signs off new North Sea projects like Shell's Jackdaw gas field. Higher oil prices can support cash flows for UK producers even while higher UK inflation keeps rate expectations elevated. For this group, the next big swing factor is how geopolitics in the Middle East affects supply fears and crude prices.
Metals and Mining: Miners slide despite critical minerals push
Metals and Mining has retreated over the past week after a softer month, even as stories like Rainbow Rare Earths and Bradda Head Lithium underline long term demand for critical minerals. Higher UK producer prices at 4.6% also remind investors that mining input costs are not trivial. Watch the UK CBI Industrial Trends Orders survey today for any fresh signal on global demand for industrial metals via export order books.
Real Estate: Warehouses steady as rates bite
Real Estate has inched higher over the past week after a flat few months, helped by SEGRO's update showing high occupancy and strong rent uplifts on UK logistics space. Higher UK inflation and the prospect of firmer Bank of England policy still weigh on more debt heavy property groups because borrowing stays expensive. The key check point here is Governor Bailey's speech this morning, which could hint at how patient the Bank is willing to be on rates.
Consumer Discretionary: Rate sensitive spending pockets diverge
Consumer Discretionary has bounced over the last seven days after a weaker year, with mixed stories underneath from Halfords, Domino's Pizza Group, JD Sports and Watches of Switzerland. Higher CPI at 3.5% and wage growth at 3.7% mean household budgets are tight, so retailers and leisure stocks can react quickly to any hint that shoppers are trading down or delaying purchases. UK Retail Sales data on Friday is the key reference point for how much demand is holding up.
Healthcare: Pharma deal flow supports sector tone
Healthcare, and particularly Pharmaceuticals & Biotech, has edged higher over the week as GSK signs a new cancer therapy licensing deal with HUTCHMED and releases supportive HIV data on Cabenuva. These announcements highlight how large drug groups can refresh their pipelines without relying only on in house research. For the sector, the main swing factor now is broader UK risk appetite as investors weigh higher inflation against the relatively defensive earnings profile of big pharma stocks.
Find Tomorrow's Top Performers
With UK CPI sitting at 3.5% and rate sensitive areas back in focus, start by stress testing your watchlist against this list of 229 resilient stocks with low risk scores .
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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