UK shares experienced a slight increase in a widespread rally on Thursday, as investor sentiment strengthened following U.S. President Donald Trump’s decision to withdraw tariff threats associated with Greenland and his declaration against using military force to acquire the autonomous Danish territory. On Wednesday, Trump reconsidered the imposition of tariffs on U.S.-bound exports from eight European nations after discussions with NATO Secretary General Mark Rutte, during which they established a framework for Greenland’s future.

A relief rally occurred throughout Europe on Thursday following a spike in trade war concerns that unsettled global markets earlier this week. The pan-European STOXX 600 was last up 1.2%. UK’s blue-chip FTSE 100 was up 0.7% by 1042, indicating a potential recovery of most of the week’s losses. The domestically-focused midcap FTSE 250 was up nearly 1.4%. Banks provided the most significant uplift to the index, increasing by 1.9%, with major players Barclays and HSBC each rising by over 1%.

Real estate stocks opened new tab and construction and materials also climbed 1.9% each. The earnings season continued to gain traction. Computacenter opens new tab shares up 10.2% after the technology Senior opened a new tab and climbed 8.9% after the engineering firm raised its annual profit forecast for the second time in two months, while AJ Bell opened a new tab and rose 4.9% after the investment platform reported a 27.7% rise in first-quarter gross inflows for its platform business. Retailer B&M has issued its second profit warning in three months. The shares experienced an increase of 2.7%, following a decline of as much as 5% earlier in the trading session.
Heavyweight energy shares were down as crude oil prices fell around 1%.

Market participants will keep a close eye on U.S. consumer spending and GDP figures set to be released later today, seeking insights into the trajectory of interest rates from the U.S. Federal Reserve. Meanwhile, in the UK, data indicated that Britain’s government borrowed less than anticipated in December, which could provide Finance Minister Rachel Reeves with reasons for optimism in 2026.