London's blue-chip FTSE 100 index retreated from a record peak to close 0.67% lower at 10,402.44 on Thursday. The benchmark had earlier reached an all-time intraday high of 10,535.76 before succumbing to selling pressure driven by lackluster UK economic data.
Schroders Soars on Transformational Bid
Asset manager Schroders surged to the top of the FTSE 100 after US-based Nuveen tabled a £9.9 billion takeover offer. The proposed deal represents the largest-ever acquisition of a European fund manager. Nuveen's chief executive described the move as "a massive transformational step for both firms."
Economic Headwinds Weigh on Sentiment
Official statistics revealed the UK economy grew just 0.1% in the fourth quarter, matching the previous period's sluggish pace. More concerning was a 2.7% decline in business investment, while services output showed zero growth and construction activity fell 2.1%. The Office for National Statistics reported full-year 2025 growth of 1.3%.
These weak figures have increased market expectations that the Bank of England could implement an interest rate cut at its upcoming March 19 policy meeting. Investors are now closely monitoring inflation data for further clues on the central bank's next move.
Broader Market Moves
The mid-cap FTSE 250 index also declined, finishing 0.48% lower at 23,304.99. While European equities generally advanced on positive earnings momentum, London stocks underperformed despite Schroders' rally sparking gains across regional financial services shares.
Market attention now shifts to upcoming US consumer price figures and UK inflation data, with any surprises likely to influence global interest rate expectations. The Schroders-Nuveen transaction isn't expected to conclude until late 2026, adding to concerns about London's appeal as a listing venue for major companies.
