Investor Insight: Bank of England Rate Cuts, FTSE 100 Winners, and Europe’s Best Stocks for Early 2026

In this week’s newsletter:

2026 is in full swing, and futures markets are out of step with economist expectations for Bank of England rate changes in 2026. We’ve been here before. This time last year, futures markets expected no rate cuts from the BoE in 2025. Investors ended up with four. Though the pace of rate cuts may now slow as the Bank approaches its so-called “terminal rate”, plenty of analysts, fund managers, and economists expect there will still be stimulus in the form of at least a couple of cuts.

Rate cuts will doubtless please stock investors, so this week readers get a full plate of stock and strategy performance analysis for the full 2025 calendar year and the months ahead. The best and worst-performing UK stocks of 2025 and the best European stocks for the first quarter of 2026 both feature in this first weekly newsletter of the year. Check out our outlook for GBPtoo. Dollar weakness versus the pound was a big story in 2025 and impacted profit margins for internationally-exposed UK stocks.

This was just one headwind the UK FTSE 100 faced in 2025, and it still managed to close over 10,000 in the first full week of 2026. Among the strong performers contributing to this upwards arc was the focus our latest stock of the week video: Rolls-Royce RR. Rolls-Royce is still rising in early 2026, but the company’s shares are overvalued, and a high level of uncertainty surrounds their progress. Watch the video below for more. As always, be sure to visit our Markets page for our latest coverage and live stock market updates.