FTSE 100 LIVE: Stocks head lower as Trump's trade war pushes gold prices to record high

The UK services sector cut jobs at the fastest pace in four years last month, according to the S&P Global UK services PMI survey.

Bosses said the rate of cost inflation was the highest for nine months in January, which in turn pushed up prices for consumers.

Tim Moore, economics director at S&P Global, warned that “stagflation conditions appeared to take a firmer hold” on Britain’s economy as the sector grappled with a downturn in new business.

He said:

China’s currency weakened overnight, pushing towards the 16-month low set last month, as traders return to work after the Lunar new year.

The dollar rose more than 0.5% against the yuan to a high of 7.2863 in onshore trade, though its gains were capped by the People’s Bank of China (PBOC) setting a stronger-than-expected yuan midpoint rate, around which the currency is allowed to trade in a 2% band.

Economists have suggested that China could respond to US tariffs by allowing its currency to weaken, which would boost exports and fight deflation.

GSK rose as much 6% today after it upped its 2031 sales outlook to more than £40bn, an increase from the £38bn previously forecast amid stronger progress in its late-stage drugs pipeline.

Total 2024 sales came in at £31.4bn, a rise of 3%, which improves to 7% at constant exchange rates.

Core operating profit rose 11% without currency fluctuations, although the total fell 40% to £4bn when including a one-off charge of £1.8bn relating to the settlement of Zantac litigation.

GSK now sees 2025 turnover growth at constant exchange rates of between 3% to 5%, with core operating profit growth of between 6% to 8%.

It also declared a dividend of 16p for the fourth quarter and expects to increase the total for 2025 to 64p a share from 61p last year. A £2bn share buyback programme is set to be implemented over the next 18 months.

Chief executive Emma Walmsley said:

Iceland’s central bank has cut interest rates by half a percentage point from 8.5% to 8%.

The Monetary Policy Committee (MPC) of the Central Bank of Iceland voted unanimously to lower its key interest rate after inflation in the country eased to 4.6% in January.

However they also warned that global economic uncertainty has risen.

Iceland’s MPC said:

New car registrations fell in the UK in January, according to the latest data on Wednesday, due to slower demand from both fleet and private buyers.

The Society of Motor Manufacturers and Traders (SMMT) said that overall registrations declined to approximately 137,000 units during the month, down 2.7% from 140,786 in December, with over a fifth of those being electric vehicles.

Total registrations for 2024 were up by 2.6%.

Ian Plummer, commercial director at Auto Trader, reported an increase in interest in electric cars, which could help the UK hit its target of banning the sale of new petrol and diesel cars by 2035.

Gold prices (GC=F) rose another 0.8% to trade above $2,850 per ounce for the first time after the additional 10% tariffs on Chinese goods entering the US came into effect.

The safe-haven asset is now up by more than 8% in the past month, adding to the record levels seen during 2024.

Charu Chanana, an analyst at Saxo Capital Markets, said:

Meanwhile, the dollar, another place of safety for investors, pulled back slightly overnight after its recent surge, with the pound up 0.2% to around $1.25.

It comes as investors are hedging against geopolitical risks, particularly on fears over the impact of a US-China trade war.

Asian markets mostly stumbled overnight, and gold hit a fresh record, as investors kept tabs on China and the United States after they exchanged tariffs.

The Nikkei (^N225) rose 0.1% on the day in Japan, while the Hang Seng (^HSI) fell 0.9% as e-commerce companies took a hit from news that the US Postal Service was suspending inbound parcels from China and Hong Kong.

The Shanghai Composite (000001.SS) was 0.7% down by the end of the session, reopening after a week-long break.

All eyes were on Washington and Beijing yesterday after they renewed their trade spat, though analysts said China’s apparently more measured approach provided some hope that a full-blown crisis could be avoided.

Trump’s tariff announcement against China included the removal of an allowance – used by China’s e-commerce firms – that exempted small packages worth less than $800 from duties. The suspension does not involve letters and flat mail.

The tepid performance in Asia came despite a positive lead from Wall Street, where there was a sigh of relief that US President Donald Trump had reached a deal to delay 25% duties on imports from Canada and Mexico.

Across the pond, the S&P 500 (^GSPC) rose 0.7%, while the Dow Jones Industrial Average (^DJI) advanced 0.3%. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) surged 1.4%.

Gold (GC=F) hit a fresh peak of $2,861.93 as investors rushed into the safe-haven metal and in the bond market, the yield on benchmark 10-year US Treasury notes fell to 4.5105, from 4.569pc late on Monday.

Good morning, and welcome to our markets live blog. As usual we will be taking a deep dive into what’s moving markets and all that’s happening across the global economy.

Here’s a quick look at what’s on the agenda for today:

• 7am: GlaxoSmithKline, Trading updates: Banco Santander, DCC, SSE

• 9am: Eurozone services and composite PMI for January

• 9am: SMMT data on UK car sales in January

• 9.30am: UK services and composite PMI for January

• 12:00pm: US MBA Mortgage Applications

• 3pm: US services and composite PMI for January

• 3:30pm: US Crude Oil Inventories