Time to wrap up, on an afternoon when expectations of a business rates U-turn have pushed up pub share prices, and left the rest of the hospitality industry hoping for the same.

As I type, Mitchells & Butlers are now up 3.5%, with JD Wetherspoons up 2.5% and Marston’s gaining 4.4%

Here’s why:

And in other news:

Ministers are preparing to U-turn over changes to business rates for pubs after a wave of disquiet from the hospitality industry, the Guardian has been told.

In yet another government climbdown on a contentious policy, details of revisions to the changes to business rates, which were set to particularly affect the hospitality industry, are to be announced in the next few days.

The move would be an attempt to “recognise issues with how business rates are collated”, a government source said. It will be part of a wider Treasury package also including measures to help pubs with areas such as licensing, opening hours and wider efforts to reduce red tape.

The pub industry has been putting pressure on ministers to act, with Keir Starmer also facing concern from a series of Labour MPs. Some pubs have even put up signs barring Labour MPs, as a protest.

Shares in UK pub and hospitality companies have jumped this morning, as the government prepares to announce a climbdown on forthcoming increases to their business rates.

Mitchells and Butlers, whose pub brands include All Bar One, Harvester, O’Neills, and Toby Carvery, are up 2.5%, one of the top risers in the FTSE 250 share index today.

Rival Marsons, which has more than 1,300 pubs, bars and inns across the country, are up 2%, while JD Wetherspoons have gained 1.2%.

Pubs have been warning for weeks that they face much higher business rates after the Chancellor announced plans to end Covid-era discounts at her budget in November.

From April, almost all commercial businesses will see their rateable value – which is used to determine the amount of tax paid in business rates – recalculated. Some pubs have reported that their rateable value have more than doubled.

PA Media are reporting that the Treasury will bring forward a package of support in the coming days, likely to include business rates relief and measures to cut licensing red tape.

On Thursday, Cabinet minister Pat McFadden said his colleagues had been “talking to the pub industry” about its worries and appreciated “how important the pub industry is economically and culturally to the UK”.

While he would not confirm that a U-turn was on the way, he added:

“We really value the role of the pub in British life. We want to help pubs.”

Newsflash: The US trade deficit with the rest of the world has shrunk sharply, thanks to a jump in goods export and a fall in imports.

The US Census Bureau and the US Bureau of Economic Analysis have announced that the US goods and services deficit fell to $29.4bn in October, a fall of 39% compared with the $48.1bn deficit recorded in September.

According to Bloomberg, this is the lowest US trade deficit since 2009. They point out that there have been large monthly swings in trade in recent months related to US implementation of tariffs.

Today’s report shows that October exports rose by $7.8bn in the month to $302.0bn, including increased shipments of industrial supplies and materials, and precious metals such as gold, whose value climbed last autumn.

US goods imports fell by $11bn to $331.4bn, including a drop in shipments of consumer goods and pharmaceutical preparations – perhaps a sign that Donald Trump’s tariffs were hitting demand.

As a results, the US goods deficit fell by $19.2bn to $59.1bn; the services surplus dipped by £400m to $29.8bn.

The new year rally in global stock markets has run out of momentum.

European markets are in the red this morning, following losses across Asia-Pacific bourses earlier today.

In London, the FTSE 100 share index briefly fell back below 10,000-point mark this morning, but has now clambered back to 10,021 points, down 26 points or 0.26% today.

AB Foods remain the top faller on the Footsie, down 11.5% after this morning’s profit warning, followed by Tesco (-5.6%).

Neil Wilson, Saxo UK investor strategist at Saxo Bank, says:

Geopolitics is the inescapable story of 2026 thus far. US Secretary of State Marco Rubio said he will meet Danish officials next week to discuss the future of Greenland.

Back here, a nasty little January profits warning from Primark-owner ABF dragged on sentiment. Shares in ABF fell about 12%, dropping to the bottom of the FTSE 100, which was off by about 0.2% in early trading on Thursday. Primark sales in Europe fell flat and the US was pretty soggy too, but UK sales were positive. Plans to spin off Primark probably just took a bit of knock. Tesco fell 5% as it failed to provide an upgrade to forecasts despite some good trading numbers over Christmas. Marks & Spencer was up after a solid Christmas report. Shell tumbled 3% as it warned on weak Q4 trading and chemicals losses.

In Oxford, UK environment secretary Emma Reynolds is trying to charm the farming community into better relations with the government.

Speaking at the Oxford Farming Conference, at the university’s dreaded Examination Schools, Reynolds thanked farmers for stepping up and clearing snow in their neighbourhoods, my colleague Joanna Partridge reports.

Reynolds also hopes there can be a “new partnership” with farmers, following the recent u-turn on inheritance tax for the sector.

But, judging by the din that a group of tractors were making outside on the High Street*, there is still anger against ministers:

* - they also made quite a racket coming through Headington this morning, on their way to the centre of the City…

Rising unemployment is one reason UK consumer confidence was weak last year – and this trend may continue.

A survey by the Office for National Statistics has found that in late December, 4% of businesses that currently use some form of AI technology have cut their workforce as a result.

Also, 5% of businesses planning to adopt one form of AI technology within the next three months reported that they expect headcount to decrease as a result too.

Shares in European weapons makers have hit an all-time high this morning, after Donald Trump declared the US should dramatically increase its defence spending.

The index of Europe’s aerospace and defence companies rose by 2% in early trading this morning to a new peak.

In London, BAE Systems’ shares are up 6%, after Trump posted last night that:

“I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars.”

Trump went on to claim that the income generated by his tariffs (which are paid by US companies, and consumers, when good are imported) would make such an increase possible.

Trump said the $1.5tn budget figure had been reached following negotiations with lawmakers and other political representatives; Congress would have to approve such an increase.

In a surprisingly leftist tilt, the US president also demanded that defence contractors cap executive pay, invest in the construction of factories and produce more military equipment, rather than splashing cash on boardroom pay and shareholder dividends.

Shares in German tankmaker Rheinmetall are up 1% this morning, while jet engine maker and servicer Rolls-Royce have risen by 0.7%.

Dan Coatsworth, head of markets at AJ Bell, points out that Primark’s womenswear operation did well in the UK, helping it to grow market share…. but that boost was wiped out by problems overseas, leading to today’s profit warning from parent company ABF:

“Marks & Spencer and Card Factory have both recently bemoaned UK high street conditions, so one might have expected Primark to deliver a Grinch of a festive update for its homeland territory. Fortunately, its UK stores did well, particularly with womenswear.

“Sadly, Primark’s mainland European stores had a terrible time, with a large decline in sales. Even the US stores were volatile. When all the different territories are factored in, Primark has disappointed big time and forced management to slash prices to rock bottom levels to clear inventories and stop its stores from gathering dust. It’s a far cry from the halcyon days where Primark could do no wrong.

“It puts parent company Associated British Foods in a difficult situation. Normally it would have other parts of its group to pick up the slack, but the food arm hasn’t been doing that well. That’s led to a nasty profit warning for the group.”

Retail analyst Nick Bubb reminds us that ABF said last year it is considering spinning off Primark, saying:

ABF’s plan to spin off Primark as a separate business won’t be helped by today’s profit warning, although investors will take some comfort from the news that UK trading was surprisingly good...

‘Super Thursday’ wouldn’t be Super Thursday without an unscheduled update and today has brought a big profit warning, in the form of the conglomerate ABF, which has warned about ‘challenging’ trading at Primark in the 16 weeks to Jan 3^rd (although, ironically, the problem is in in Europe, where LFL sales slumped by 5.7%, not the UK, where LFL sales were up by an encouraging 1.7%).

Ouch! Shares in Associated British Foods have dropped by over 10% after it startled the City with a profit warning at 7am.

ABF told shareholders this morning that sales growth at its Primark chain were below expections in the last 16 weeks, and that the discount clothing chain struggled in Europe and in the US.

In another blow, ABF’s food and ingredients business had “experienced mixed trading”, with sales falling more than expected in the US.

The company now expects its adjusted operating profit and adjusted earnings-per-share to be lower than last year.

In the UK, Primark’s like-for-like sales grew by 1.7% in “a difficult clothing market, particularly over Christmas”, the company says, pointing to initiatives such as “enhancing our product offer, improving price perception and increasing digital customer engagement”.

But in continental Europe, where such initiatives to the UK only recently began, like-for-like sales declined around 5.7% in the period.

George Weston, chief executive of Associated British Foods, says:

“Primark has had a challenging start to the financial year, with a mixed performance. In the UK, focused actions and investments to strengthen our customer proposition have driven improved trading and market share gains, while trading has remained weak in continental Europe.

In a challenging consumer environment, our focus is on factors within our control, including initiatives now underway in Europe aimed at improving performance. We are also making good progress to deliver Primark’s medium and longer-term growth opportunities.

Our food businesses experienced mixed trading in the period, particularly in the US where consumer demand in certain categories has continued to weaken. While we expect the tough trading conditions to continue in the short term, we remain confident in the overall prospects for the Group.”

Tesco are among the top fallers on the UK’s FTSE 100 share index at the start of trading in London.

They’ve dropped by 5%, with rival Sainsbury’s (whose results are due tomorrow) down 2.9%.

Kathleen Brooks, research director at XTB, says Tesco’s resulst are not a ‘roaring success’, despite the pick-up in sales at Christmas.

In the UK, the focus on Thursday is on domestic matters, specifically who were the retail winners from the crucial Christmas trading period. Tesco reported earnings that missed estimates, 3Q Like for like sales were 3.1%, versus estimates of a 4.8% gain. However, sales picked up over the Christmas period, rising 3.3%. This contributed to their highest UK market share in over a decade and allowed the company to confirm its earnings guidance for this financial year at the high end of estimates. Thus, earrings were saved by Christmas for the grocer and they could be up to £3.1bn. Online sales were also strong and rose more than 11%.

Overall, its earnings have not been a roaring success, although the pickup in Christmas trade is encouraging, and managing to retain the high end earnings guidance for this year could also boost sentiment towards the UK’s largest supermarket chain. Its stock price has been static for the past month, as investors wait for a driver. This earnings report may not set the world alight, but it could boost the share price later as it suggests that Tesco can maintain market share and profits in a challenging operating environment and where the UK consumer is constrained.

British house prices unexpectedly fell in December, lender Halifax has reported.

According to Halifax’s data, the average price of a UK property dropped by 0.6% last month, and were just 0.3% higher than a year earlier.

That’s the weakest annual growth since March 2024, with the average property price now £297,755, the lowest since June, according to Halifax.

Amanda Bryden, head of mortgages at Halifax, says:

“While this may feel like a subdued close to the housing market in 2025, overall activity levels were resilient over the last year and broadly in line with the pre-pandemic average.

Bryden also suggests that various forces could lift the market this year, saying:

While December’s monthly fall in prices was likely related to uncertainty in the latter part of the year, this should now be starting to unwind.

Further, mortgage rates are already reducing following the latest Base Rate cut and there are an increasing number of lending options available for those borrowing at a higher loan-to-value.

Property agent Emma Fildes of Brickweaver explains that home owners looking to sell their homes over Christmas accepted “realistic prices” from motivated buyers.

Baking chain Greggs has told shareholders that market conditions remain “challenging”.

Greggs insists, though, that it is continuing to outperform the market, by growing its market share compared with a year ago.

It has reported that like-for-like sales at its company-managed shops rose by 2.9% in the fourth quarter of last year.

Greggs says that “subdued consumer confidence continued to impact the food-to-go market, as did weather extremes earlier in the year” (when it was either too cold or too hot).

Roisin Currie, Gregg’s CEO, says:

“We made good progress in 2025, in a challenging year where subdued consumer confidence impacted the food-to-go market. Against this backdrop, I’m pleased that Greggs outperformed the wider market and increased its market share of visits.

“We enter 2026 with a strong pipeline of new opportunities to make Greggs even more convenient for customers. This is underpinned by the investments we have been making in our supply chain capacity, which start to become operational this year. Our ongoing focus on efficiency allows us to deliver exceptional value to customers who are managing their budgets carefully.”

Interestingly, M&S blames ‘reduced’ shopper numbers on the high street for the drop in sales at its fashion, home and beauty division, as well as the knock-on impact of last year’s cyber attack.

It tells shareholders:

Fashion, Home & Beauty sales decreased 2.5%, with like-for-like sales down 2.9% as online sales growth was offset by store sales decline.

Performance reflected reduced high street footfall, and the long tail impact on stock data and management following the incident earlier in the year. Stock into Sale during December was higher than last year but sell-through rates have been strong.

Marks & Spencer has reported a jump in food sales over the Christmas period, but its clothing, homewear and beauty division continued to be hurt by the cyber-attack last year.

M&S’s food sales rose by 6.6% in the 13 weeks to 27 December, but taking at its fashion, home & beauty operations fell 2.5% in the period.

Stuart Machin, M&S chief executive says:

“A record number of customers shopped M&S this Christmas. From the festive food shop, to picking up party outfits and gifts, millions more trusted M&S to deliver the family Christmas.

Food sales were strong and the business continues to outperform, hitting a new market share milestone in the period. We are the UK’s fastest growing grocer for families, reflecting our investment in value and core family staples, and demonstrating progress in our journey to become a shopping list retailer.

Fashion, Home & Beauty is getting back on track as we work through the tail end of recovery. Sales overall were slightly down but online performance continued to improve as digital sales recovered. We planned a bigger Sale this year, with strong sell-through already making way for our new season lines.

Here we go! Tesco’s Christmas results have just landed in the City, and it has slightly lifted its profit forecast for this year.

Chief executive Ken Murphy declares he is “delighted with the strong Christmas we delivered for our customers”.

Tesco has reported that UK sales rose by 3.2% in the six weeks to 3 January, and by 3.9% in the previous 13 weeks (its third quarter).

Sales of its Finest food range rose by 13.0%, with “particularly strong growth” of 22% in Tesco’s party food range.

Like-for-like Home & Clothing sales rose 2.1%, including clothing growth of +4.4% for the Christmas period.

And in a boost to shareholders, Tesco is now predicting that “following a strong Christmas performance” it expects to post adjusted operating profits at the upper end of the £2.9bn to £3.1bn guidance range issued in October.

Murphy says:

Our investments in value, quality and service drove further gains in customer satisfaction and strong growth in fresh food, contributing to our highest UK market share in over a decade.

Retail tech firm MRI Software has reported that UK retail ended 2025 on a far stronger note than expected.

MRI’s data shows that footfall at retail sites in December rose by 1.3% year on year, the biggest annual uplift for the month since 2011.

MRI explain:

The festive boost was driven by a sharp rise in evening and night-time visits, up +5.3% after 5pm, as shoppers increasingly combined retail with dining, leisure, and socialising. High streets led annual growth (+2.0%), followed by retail parks (+1.2%) and shopping centres (+0.1%), reinforcing the role of experience-led trips in driving footfall.

Boxing Day was the standout trading day, recording its strongest performance in a decade. Footfall rose +4.4% year on year across all retail destinations, with evening visits up almost +10%, underlining how post-Christmas trading is shifting away from purely transactional shopping towards social and experiential activity.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The Christmas leftovers are over, and any ill-fitting clothes or inappropriate gifts could have been returned, but we’re still learning which retailers won, or lost, over the festive season.

This morning, retail heavyweights Tesco and Marks & Spencer are about to release trading results covering the Christmas period, along with baking chain Greggs.

These results may show whether cautious consumers cut back over Christmas, or pushed the boat out, and whether the budget in late November had any impact on spending.

Data earlier this week showed that spending on promotions and deals reached its highest level since before the pandemic in December, which will have squeezed profit margins….

There could also be details on the impact of avian flu on the UK turkey flock, which forced some supermarkets to import birds from elsewhere in Europe. Last month, Marks & Spencer said all its turkey was sourced from Britain or Ireland, while the Co-op, Sainsbury’s and Tesco said their turkey was entirely British-sourced.

City analysts will also be scrutining Greggs’ results, due to concerns that the chain may be over-expanding as its sales growth slows….

The agenda

• 7am GMT: Tesco, Greggs, and M&S release financial results

• 7am GMT: Halifax house price index for December

• 10am GMT: Eurozone unemployment data for November

• 12.30pm GMT: Challenger US jobs cut report

• 1.30pm GMT: US weekly jobless claims

• 1.30pm GMT: US trade data for October