UK markets rose this week, with the FTSE 100 Index gaining 1.55% to trade at 10,100 points at the time of writing.
Rachel Reeves is set to announce a package of relief for pubs in the coming days that will include tweaks to the business rates system as well as a more relaxed licensing system. The Chancellor commissioned officials and junior ministers to examine the impact of her Budget on the sector in recent weeks after a major backlash from landlords, according to officials. Reeves has concluded that pubs need relief from the full impact of changes to business rates that were announced in the November Budget. In addition, there will be changes to licensing to allow later hours and more pavement drinking.
This marks the latest in a series of U-turns by Sir Keir Starmer’s Labour government, following the Prime Minister’s decisions to change tack over the removal of winter fuel payments, an attempt to cut billions in disability welfare payments and over higher inheritance tax on farm estates. Pub groups and independent landlords have been furious about the changes to the business rates system, arguing that it would cause huge jumps in payments over the next three years.
More than a thousand landlords have announced they are banning all Labour MPs from their premises. Reeves is also under growing pressure from restaurants, shops, cafes, hotels and music venues to rethink the impending rise in business rates.
Elsewhere, UK house prices rose by 0.6% in 2025 after a slowdown at the end of the year, according to lender, Nationwide. The rise in the average house price for the 12 months to December was lower than analysts’ expectations and down from 1.8% in November, data showed on Friday. Prices fell 0.4% between November and December to an average of £271,068. Both figures were below analysts’ expectations of a 1.2% annual rise and a 0.1% month-on-month expansion.
Commodity markets
In the commodity markets, Brent crude futures traded around $62 per barrel on Friday and are set for a weekly rise, as investors assessed developments in Venezuela and worried about supplies from Russia, Iraq and Iran.
The US seized two Venezuela-linked oil tankers in the Atlantic Ocean on Wednesday, with one sailing under Russia’s flag, as part of US President Donald Trump’s aggressive push to dictate oil flows in the Americas and force Venezuela’s socialist government to become an ally. After capturing Venezuelan President Nicolas Maduro in a military raid on Caracas on Saturday, the US has been escalating its blockade of vessels that are under sanctions and traveling to and from the South American country, a member of the Petroleum Exporting Countries.
The US could oversee Venezuela and control its oil revenue for years, Trump said in a New York Times interview published on Thursday. The US Senate advanced a resolution on Thursday that would bar Trump from taking further military action against Venezuela without congressional authorisation. US Energy Secretary Chris Wright said there was room to balance roles for both the US and China in Venezuela to allow for commerce, but that Washington would not allow Beijing to have major control over the South American Country.
India’s Reliance Industries operator of the world’s largest refining complex, said it will consider buying Venezuelan oil if permitted for sale to non-US buyers. Venezuela produces about 1% of the world’s oil supply. Oil prices also gained support after US Republican Senator Lindsey Graham said on Wednesday that Trump will allow a bipartisan sanctions bill targeting countries doing business with Russia to move forward in Congress.
Gold prices traded around $4,470 an ounce on Friday and are set for a weekly rise, supported by escalating geopolitical risks that have boosted safe-haven demand. President Trump has warned of a strong response to potential Iranian violence against protestors, a statement that followed recent US actions in Venezuela and subsequent threats to seize control of Greenland using military force. Bullion also received support from continued central-bank purchases, with China extending its gold-buying streak for a 14th month.
Equity markets
US equity futures rose on Friday as the outlook of rate cuts by the Federal Reserve and returns to artificial intelligence spending continued to support the earnings prospective. In Thursday’s regular trading session, the Dow Jones Industrial Average advanced 0.55%, the S&P 500 gained 0.01%, whilst the Nasdaq Composite declined 0.44%. The US trade deficit narrowed to its lowest level since 2009 in October, as President Trump’s tariffs continued to prompt fluctuations in imports.
The gap between imports and exports of goods fell 39% from the previous month, to $29.4 billion, according to data released by the US Department of Commerce on Thursday. This reduced the deficit to its narrowest level in more than 16 years, and was also much narrower than the $59.8 billion predicted by economists polled by Reuters. The 3.2% drop in imports was mostly fuelled by pharmaceutical products. President Trump threatened tariffs on the pharmaceutical sector throughout 2025, prompting companies to boost their imports of those goods after he returned to the White House in January. The lower than expected trade deficit for October is likely to provide a tailwind for economic growth figures in the fourth quarter.
Elsewhere, President Trump has said he would launch a $200 billion mortgage bond-buying programme in an attempt to lower mortgage rates, as he seeks to tackle an affordability crisis that has weighed on his popularity. US housing finance director Bill Pulte said the purchases would be made by a mixture of Fannie Mae and Freddie Mac, the two government-sponsored enterprises tasked with buying lenders’ mortgage loans and repackaging them as mortgage backed securities.
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