Markets gain after positive retail sales data and record budget surplus

Brian Mcgleenon writes:

The UK’s regulatory sandbox, launched in 2016 by the Financial Conduct Authority (FCA), is designed to let financial firms test innovative products and services in a controlled environment. Instead of navigating the full weight of regulation from day one, companies can trial new offerings with real consumers under the regulator’s supervision, subject to safeguards and defined limits.

For crypto firms aiming to operate within the UK, that matters. The sandbox lowers barriers to entry, reduces time to market, and gives startups clarity on how existing rules apply to emerging technologies like tokenisation, stablecoins or blockchain-based settlement systems. It also gives the FCA early visibility into new business models, helping shape future rule-making.

Read more on Yahoo Finance UK

In response to the latest public finance figures, chief secretary to the Treasury, James Murray, said:

Nabil Taleb, economist at PwC UK, said:

Yahoo Finance UK’s Vicky McKeever writes:

The UK government recorded its largest ever budget surplus in January, in a boost for chancellor Rachel Reeves ahead of the spring forecast.

The public sector recorded a surplus of £30.4bn in January, according to figures published by the Office for National Statistics (ONS) on Friday. This was £15.9bn, or double the surplus recorded in January 2025, and was £6.3bn higher the Office for Budget Responsibility’s (OBR) November forecast. This was also the highest surplus in any month since records began in 1993.

The government usually records a surplus in January because tax receipts are higher than in other months due to receipts from self-assessed taxes. The ONS said that combined self-assessed income and capital gains tax receipts were provisionally estimated at £46.4bn in January 2026, which was £10.5bn more than January last year.

Government borrowing for the financial year to January came in at £112.1bn, which was £14.6bn, or 11.5%, less than in the same 10-month period a year ago. However, the ONS highlighted that this was still the fifth-highest April to January on record.

Read more on Yahoo Finance UK

US stock futures rose Friday morning as investors braced for a heavy slate of economic data after the end of a three-day winning streak for the Dow and S&P 500.

Contracts linked to the Dow Jones Industrial Average (YM=F) rose 0.1%. S&P 500 futures (ES=F) climbed roughly 0.3%, and Nasdaq 100 futures (NQ=F) made gains of 0.3%.

Meanwhile, markets will turn their attention Friday morning to a fresh reading of the the Personal Consumption Expenditures index. Consensus estimates call for headline PCE to rise 2.8% year over year, with core PCE, which strips out food and energy and is the Federal Reserve’s preferred gauge of inflation, increasing 3% over the same period. Investors will also get the first reading of fourth-quarter US GDP.

Regarding the future of rate cuts, Fed officials remain split on the path ahead. While inflation has moderated from its peak, it continues to run above the central bank’s 2% target. Minutes from the January meeting suggest some policymakers want clearer evidence that price pressures are cooling before endorsing additional rate cuts, while others are focused on protecting labor market strength.

Read more on Yahoo Finance

Hello from London. Lucy Harley-McKeown here — ready to bring you the business and finance headlines of the day.

This morning we’ve already had UK borrowing figures and retail sales data (more on those later).

There’s also the latest flash purchasing managers’ indices for manufacturing and services industries from Japan, Asia, Europe, the UK and US to come.

In the US, the latest Personal Consumption Expenditure (PCE) index will be the key calendar event to watch.

Key earnings include mining giant Anglo American (AAL.L)