The Morning Bull - UK Market Morning Update Thursday, 29 Oct 2026
UK equities are set for a softer open, with FTSE 100 futures pointing lower as the focus swings firmly back to domestic inflation. The main driver this morning is the jump in UK shop price growth that challenges recent disinflation comfort.
Shop price inflation has picked up to 2.1% year on year in October, with food at 2.9% and non food at 1.7%. That move contrasts with the broader CPI backdrop at 3.5% in September and prompts investors to reassess how quickly price pressures might cool.
For the UK market, this matters because persistent shop price pressure can feed into higher borrowing expectations. That can keep yields elevated, put pressure on rate sensitive balance sheets and compress margins for consumer facing businesses already contending with cautious spending.
The key question is whether the Bank of England treats this latest shop price data as noise or as evidence that inflation progress is stalling. Upcoming UK credit figures and global inflation releases will indicate whether today's inflation driven caution persists.
Stocks to Watch Before the Opening Bell
Rio Tinto Group (RIO)
Fresh investment puts Rio Tinto's energy transition story back in focus. The miner has opened its Fénix 1B expansion and Sal de Vida lithium projects in Argentina after about US$1.4b of spending. Both sites have started production and are ramping up toward 25,000 tonnes of lithium carbonate equivalent capacity. Watch how quickly output scales and contract terms with battery customers.
Glencore (GLEN)
Glencore is stepping further into battery metals supply. The group and China's CNGR are putting US$40 million into Centaurus Metals and have agreed to take all nickel concentrate from the Jaguar project in Brazil for the first five years. Funding progress at Jaguar and any updates on offtake pricing will shape how meaningful this becomes for Glencore's future mix.
Rolls-Royce Holdings (RR.)
Government money is now firmly behind Rolls-Royce's UltraFan programme. The UK has pledged up to £1.25b over the next decade, alongside £2.5b of planned spending from the group, to support a next generation turbofan for short haul aircraft. Investors will track contract milestones, job creation targets of about 3,300 roles by 2029, and how quickly airlines engage with the technology.
Top Movers
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Rank Group (LSE:RNK)jumped 11.66% after mid cap gaming stocks outperformed during a broad based London rally.
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Whitbread (LSE:WTB)gained 5.59% as investors reacted to Corvex and Glass Lewis support for board representation changes.
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SSE (LSE:SSE)climbed 4.58% following a rebound in sentiment toward UK utilities after recent sector weakness.
Top Losers
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Hunting (LSE:HTG)fell 9.52% after cutting 2026 EBITDA guidance on weaker Middle East and North America activity.
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Dar Global (LSE:DAR)declined 6.63% as investors weighed its expanded global real estate investment push focused on high value Dubai projects.
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Vistry Group (LSE:VTY)dropped 5.87% following investor reaction to CFO changes and the appointment of Helen Miles and Robert Allen.
On The Radar
UK housing and credit data coincide with major central bank decisions and a fresh batch of domestic earnings, setting the tone for how much pressure UK borrowers and retailers feel into the weekend.
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UK BoE Consumer Credit, Thu 29 Oct. A print versus the £2.2b consensus will show how willing households are to borrow at current rates, which feeds directly into UK banks' loan growth and perceptions of consumer strain.
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UK Mortgage Approvals and Mortgage Lending, Thu 29 Oct. Outcomes against the 54k approvals and £4.2b to £4.5b lending estimates matter for listed housebuilders and high street banks because they signal near term housing turnover and fee income.
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US Core PCE and GDP QoQ, Thu 29 Oct. Readings versus 0.3% core PCE and 3.2% GDP forecasts will influence US rate expectations, which tend to ripple through to gilt yields, sterling and global-facing FTSE 100 stocks.
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ECB Rate Decision and Press Conference, Thu 29 Oct. Keeping the main rate around 2.65% with a 2.5% deposit facility rate frames euro funding conditions, which can shift EUR/GBP and affect UK exporters' competitiveness into the year end.
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BoE Interest Rate Decision and Monetary Policy Report, Thu 5 Nov. Any move away from the previous 3.75% toward the 4% consensus, along with updated projections, directly affects UK borrowing costs, equity valuations and rate sensitive UK sectors.
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Marks and Spencer Group, Wed 4 Nov. First half 2027 numbers will put the focus on margins and like for like food and clothing revenue, which together show how far rising shop prices are being absorbed by shoppers versus squeezed into profits.
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Trainline, Wed 4 Nov. First half 2027 results will centre on ticket sales and take rate, giving a clean read on UK leisure and commuter travel demand at a time of higher fares and household budget pressure.
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Prudential, Wed 4 Nov. The nine month 2026 update will highlight new business volumes and capital strength, two metrics that shape how much flexibility the insurer has for future growth investment and shareholder distributions.
Sector & Industry Watch
Banks: Tax hit but relief on fears
Banks have fallen over the past week as the sector adjusts to the higher 6% surcharge, although shares rallied after the Autumn Budget came in below the feared tax hike. UK lenders such as Lloyds, NatWest, Barclays and Standard Chartered all moved on the news, with further commentary on Hong Kong income influencing HSBC sentiment.
If you own bank stocks, the clearest next signal is today's Bank of England consumer credit and mortgage approvals data, which will show how higher day to day prices and borrowing costs are feeding into loan demand and bad debt risk.
Metals and Mining: Battery metals in the spotlight
Metals and Mining has slipped over the past week and month, even though returns over the past year remain positive for the group. Rio Tinto and Glencore keep focus on future facing output, with lithium and nickel projects in Argentina and Brazil moving forward, while smaller miners such as Metals Exploration and Gem Resources are reshaping portfolios.
For anyone holding miners, the key catalyst to watch is China related industrial data and profits, since that feeds directly into demand expectations for copper and other metals that drive this sector's earnings power.
Real Estate: Gentle rise meets housing strain
Real Estate has edged higher over seven days and the past month, outperforming the slightly weaker GB Market in the short term. Activity around SEGRO and other listed landlords highlights how big investors remain engaged, while companies exposed to building, such as BRCK Group, underline how softer housebuilding and inflation can squeeze profit guidance.
If property is a sizeable part of your portfolio, today's UK mortgage approvals and lending numbers are the cleanest check on whether this recent upturn sits comfortably with actual buyer demand and financing appetite.
Food, Beverage & Tobacco: Pricing power versus tighter wallets
Food, Beverage & Tobacco has gained over the week and month, outpacing the broadly flat GB Market at a time when UK shop price inflation has picked up to 2.1%. Groups such as Unilever and Diageo continue to lean on brands and premium launches, while MicroSalt focuses on low sodium products that line up with health and regulatory trends.
For holders of supermarkets or branded food and drink stocks, the next thing to watch is how listed companies talk about UK volumes and promotions around Christmas, since that will show whether shoppers are trading down or absorbing higher shelf prices.
Tech: Solid trend, AI and chips mixed
Tech has risen over the past week and remains one of the stronger sectors year to date, even though Semiconductors have given back part of a very large earlier move. UK technology exposure now blends AI heavy stories such as Polar Capital Technology Trust and Oxford Nanopore with weaker pockets like Mirriad Advertising, which faces delisting and administration.
If you hold tech funds or individual stocks, the single most important driver near term is the combination of US Core PCE inflation and GDP data later today, because any shift in rate expectations can quickly change how investors treat higher growth sectors globally, including UK listed technology names.
Where Are The Opportunities Now?
With UK mortgage approvals, housing strain and property shares all under the microscope, it may be useful to start with this list of list of solid balance sheet and fundamentals (203 results) .
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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