London pre-open: Stocks to nudge up as Starmer lives to fight another day

(Sharecast News) - London stocks were set to nudge up at the open on Tuesday as Prime Minister Keir Starmer lived to fight another day, with earnings from the likes of AstraZeneca and Barclays in focus.

The FTSE 100 was called to open around six points higher.

The latest drama at Westminster was set to remain in the spotlight, after Starmer lost his chief of staff on Sunday and his director of communications on Monday amid the fallout from his decision to appoint Mandelson as ambassador to the US.

Michael Brown, senior research strategist at Pepperstone, said: "After the Cabinet rallied round the PM, and former Deputy Leader Rayner also offered her support, peak danger in terms of Starmer's political future appears to have passed for now.

"Hence, Starmer will likely stagger on, essentially a PM in name only with little political capital remaining to enact any significant policy proposals or legislative measures, prolonging his inevitable departure for a little longer.

"The Gorton & Denton by-election on 26th Feb, and more importantly local elections on 7th May, remain key dates to watch. While Cabinet support shows that the 'herd' is together for now, that likely owes more to nobody yet being in a position to run, than it does loyalty to the boss."

Politics aside, investors will be mulling the latest retail industry data out earlier, which showed that sales across the UK picked up strongly in January, as New Year promotions spurred consumer spending following two months of subdued growth.

According to the British Retail Consortium-KPMG monthly UK retail sales monitor, sales rose 2.7% year-on-year over the four weeks to 31 January.

That's up from the meagre 1.4% increase seen in November, as pre-Budget jitters and a weak Black Friday limited spend, and a 1.2% rise in December on the back of strong prior-year comparatives and people holding out for January sales.

It was also comfortably above the 12-month average growth rate of 2.3%.

According to the BRC, food sales were up 3.8% over last January, following a 3.1% year-on-year increase in December, while non-food sales rose 1.7% following the previous month's 0.3% decline.

"A drab December gave way to a brighter January as retail sales picked up pace," said BRC chief executive Helen Dickinson.

"Many shoppers had held off Christmas spending and waited for the January sales, with the start of the new year showing the strongest growth. And bargain hunting was not limited to online, with in-store sales showing the highest growth in over six months."

However, Dickinson warned of "many challenges" to come in 2026, with consumer confidence still weak and the cost of energy and packaging on the rise. Meanwhile, she cited the new Employment Rights Act - which includes the end of zero-hours contracts - as limiting the ability of retailers to offer "more flexible jobs".

In corporate news, Barclays lifted performance targets after annual profits jumped 13% as it also unveiled a new �1bn buyback.

Pre-tax profit came in at �9.1bn, with group income up 9% to �29.1bn also boosted by the acquisition of Tesco Bank.

Barclays is now aiming for a return on tangible equity of more than 14% in 2028 and capital distributions of greater than �15bn in the next two years.

AstraZeneca posted a jump in full-year revenues and earnings, boosted by strong demand for its oncology drugs.

The blue chip pharma saw total revenues in the year to December end rise 9%, or by 8% on a constant currency basis, to $58.7bn. Core earnings per share were 11% stronger in constant currencies, at $9.16. Both figures were in line with expectations.

Homeware retailer Dunelm reported a drop in interim profit following softer trading in the second quarter.

In the 26 weeks to 27 December 2025, pre-tax profit fell 7.5% to �114m, while revenue ticked up 3.6% to �926.3m.

Housebuilder Bellway said that despite "subdued" trading through autumn, it had delivered a robust first-half performance, with total housing completions growing 2.7% to 4,702 at an average selling price of roughly �322,000.

Bellway also said it was on track to achieve its full-year volume target of around 9,200 homes as it pointed to "clear signs of improving customer demand" in the early weeks of the spring selling season.