British equities slipped further as trading opened, mirroring weakness across European bourses amid heightened concern over events in the Middle East and a softer pound. By 08:21 GMT the FTSE 100 was down 1.4% while sterling lost ground, the GBP/USD exchange rate falling 0.7% to 1.3322.
The sell-off in Europe was broad-based. Germany’s DAX retreated 2.3% and France’s CAC 40 declined 1.6% as investors reduced exposure to risk assets and reassessed near-term economic and policy uncertainty.
Geopolitical developments drove much of the market mood. United States President Donald Trump said overnight that the U.S. will do "whatever it takes" to achieve its military objectives, and indicated that operations could continue for several weeks. Market participants noted the potential for prolonged uncertainty while assessing the likely economic consequences of extended military activity.
Investment bank Jefferies commented that an exit strategy for U.S. forces would not be straightforward. Jefferies added that a leadership change while the current regime remains in power would likely be insufficient for either the U.S. or Israel, and that Mr. Trump would seek more concrete results in dismantling Iran’s nuclear capabilities. "At this stage, we do not see Iran agreeing to US terms and willingly agree to give up its nuclear ambitions. Unfortunately and sadly from a human perspective, both side may see more pain before we can reach a stage where an agreement is possible," Jefferies added.
Political relations between the United Kingdom and the United States also entered the market narrative after comments from Mr. Trump. In an interview with a British tabloid he said the relationship with Britain has deteriorated after Prime Minister Keir Starmer initially withheld military backing for strikes against Iran. "It’s very sad to see that the relationship is obviously not what it was," Mr. Trump said. He added the U.S. did not need Britain’s help to conduct military operations in the Middle East but argued the U.K. should have offered support. "It’s not going to matter, but (Starmer) should have helped… he should have," he said. Late on Sunday, Prime Minister Starmer said he would permit the U.S. to use British military bases for defensive strikes after those facilities were not used in the initial action against Iran.
Alongside geopolitical drivers, investors scrutinised a slate of corporate year-end results and capital return announcements that produced a mixed picture across sectors.
Greggs PLC reported a full-year profit before tax of £171.9 million for the 52 weeks ended December 27, 2025, a decline of 9.4% from £189.8 million the prior year. The profit figure matched analyst expectations of £171.6 million. Total sales rose 6.8% year-over-year to £2,151 million, supported by new shop openings. Like-for-like sales in company-managed shops increased 2.4%, down from 5.5% growth in 2024. The bakery chain cited challenging market conditions and an unseasonably hot summer during the period.
Inchcape Plc reported a full-year 2025 pretax profit of £443 million for the year ended December 2025, in line with company-compiled consensus. The automotive distributor launched a £175 million share buyback, its second buyback programme in less than a year. Earnings per share rose 13% on a constant currency basis to 80.8 pence, coming in 2% ahead of the 79.1 pence consensus estimate. The full-year dividend was increased 13% to 32.3 pence.
Aberdeen Group Plc pushed back its £1 billion net inflow target by a year to 2027. The wealth and investment manager reported adjusted operating profit of £264 million for full year 2025, up 4% from £255 million a year earlier. IFRS profit before tax rose 76% to £442 million, a performance the company said was boosted by gains on its stake in Standard Life Plc. Assets under management and administration rose 9% to £556 billion, while operating profit at its retail trading unit interactive investor jumped 34%.
Fresnillo reported adjusted revenue rising 27.6% year-over-year to $4.65 billion for 2025, while total revenue increased 30.5% to $4.56 billion. EBITDA climbed 80.7% to $2.80 billion, and gross profit more than doubled to $2.66 billion, as the miner benefited from higher precious metals prices and tighter cost discipline.
Keller Group PLC posted full-year 2025 revenue of £3.09 billion and adjusted earnings per share of 211.3 pence. The geotechnical specialist contractor reported revenue growth of 5.9% on a constant currency basis, with adjusted operating profit rising 6.5% to £218.2 million. Keller announced a new £100 million share buyback programme.
International Workplace Group Plc reported adjusted EBITDA rising 6% to $531 million for full-year 2025, with system-wide revenue reaching $4.5 billion, up 4% year-over-year. The company increased its 2026 share buyback programme by $50 million to $100 million.
Allfunds Group Ltd reported full-year 2025 results with assets under administration reaching €1.76 trillion and net revenue of €639.9 million, both approximately 1% ahead of consensus estimates.
Morgan Advanced Materials reported sales of £1,030 million for 2025, versus consensus estimates of £1,015 million. Organic growth declined 3.3%, an outcome the company said was better than the consensus forecast of a 4.3% decline. Earnings before interest, tax and amortization came in 7% below forecasts. The company said its 2026 outlook aligns with current market expectations.
Johnson Service Group PLC reported full-year 2025 adjusted EBITA of £72.5 million, closely aligned with analyst expectations of £72.1 million.
With the U.K. Spring Budget also on investors' agendas, market participants balanced near-term geopolitical risks against corporate earnings and shareholder returns. Several groups used their results announcements to confirm or expand buyback programmes, while others signalled slower growth or deferred internal targets into later years - developments that investors will weigh alongside macroeconomic and policy updates.