UK Market Breakdown: Mid Caps Beat Blue Chips, Week of 28 September 2026

London's two main indices parted company over the first three sessions of this week. The FTSE 100 closed on Wednesday at 10,606.00, down 0.8% from Friday's 10,695.25, having fallen in every one of the three sessions. The FTSE 250 did the opposite, rising every day to finish at 24,539.99, a gain of 1.1% from Friday's 24,261.14.

The split had one dominant cause. On Monday the government set out Your First Home, a scheme that would let eligible first-time buyers in England purchase a new-build property with a deposit of just 2.5% alongside a government equity loan worth 20% of the property's value, with an initial interest-free period. Housebuilders and the companies that supply them carry far more weight in the mid-cap index than in the blue chips, and they rose hard.

Pulling the other way for the FTSE 100 were a precious metals rout that knocked the big miners on Monday, a retreat in oil that hit the energy majors on Tuesday, and hot euro-area inflation readings that killed an early Wednesday rally.

The FTSE 100

Monday was the mildest of the three sessions at index level and the most eventful beneath the surface. The FTSE 100 slipped 0.1% to 10,684.88, as the housebuilding rally was more than cancelled out by mining weakness. Steep falls in gold and silver dragged London's diversified miners down: Antofagasta dropped 2.9%, Anglo American fell 2.4%, Glencore declined 2.1% and Rio Tinto lost 1.7%. Higher bond yields and a firm US dollar reduce the appeal of metals that generate no income, and the selling came even though copper futures rose 1.5% on the day.

Tuesday was heavier. The index fell 48.17 points, or 0.5%, to 10,636.71, a two-week low, with the heavyweight energy names the principal drag as oil prices retreated. British American Tobacco added to the weight, falling around 1.7% after a capital markets day in Winston-Salem that left investors who had hoped for an upgrade to near-term guidance disappointed.

Wednesday was the most awkward session of the three. The index climbed to roughly 10,725 in the opening minutes, helped by a better-than-expected revision to UK growth, then spent the rest of the day handing it back, closing 30.71 points lower at 10,606.00, a fall of 0.29%. Coverage of the session attributed the fade to a wave of hot inflation data from continental Europe and still-elevated global bond yields, which together outweighed softer US inflation and a steadier oil price. What strength there was came from the defensive and rate-sensitive end of the market: Antofagasta, Reckitt Benckiser and SSE were the index's three biggest risers, each adding somewhere between 2% and 3%, with utilities broadly firm. Airtel Africa was the day's weakest performer, down more than 3%.

The FTSE 250 and mid caps

The mid-cap index managed something the FTSE 100 could not do once: it closed higher on all three days. From Friday's 24,261.14 it added 0.3% to 24,335.32 on Monday, 0.2% to 24,374.81 on Tuesday and 0.7% to 24,539.99 on Wednesday.

Monday's equity-loan announcement did most of that work, and the reaction travelled well beyond the builders themselves into the construction supply chain. Brick maker Ibstock rose 22.3%, paving and landscaping group Marshalls gained 13.8% and builders' merchant Travis Perkins added 10%. The enthusiasm was front-loaded: at one stage on Monday the FTSE 250 was up 243 points, or 1%, at 24,504, and it surrendered most of that before the close.

AIM had a new arrival on the same day. 1947 Oil & Gas began trading on the junior market on Monday with an opening market capitalisation of £65m. It issued 500m new shares at 10p each, of which 297.5m were sold to new investors to raise £29.75m, with the remaining 202.5m issued to Renaissance Offshore Holdings to pay for the acquisition of Houston-based producer Renaissance Offshore, a deal that completed on admission.

The week's biggest movers

Vesuvius produced the week's single biggest corporate surprise. The refractories and molten-metal-flow engineer confirmed on Tuesday that it was carefully evaluating a cash-and-shares proposal from Austria-based rival RHI Magnesita valuing it at 551p a share, or about £1.37bn. The terms are 470p in cash plus 0.28 new RHI shares for every 10 Vesuvius shares, a premium of roughly 47% to Monday's close, and the approach has the support of Vesuvius's largest shareholder, the activist investor Cevian Capital. It is not RHI's first attempt: the board has rejected several approaches since September 2025, beginning at 448p a share in cash.

The housebuilders moved as a bloc on Monday rather than on company-specific news, with the FTSE 350 housebuilding index up as much as 16% during the session. Persimmon, Bellway, Barratt Redrow and Taylor Wimpey all gained between 12% and 15%. Some of that came back later in the week: Barratt Redrow was among Wednesday's biggest FTSE 100 fallers, down more than 2%. The scheme remains a proposal whose eligibility rules, income limits and regional price caps are still to be set out.

Greggs and Saga produced the week's two best earnings reactions, both covered below. On the downside, Airtel Africa was the FTSE 100's weakest stock on Wednesday, while British American Tobacco's Tuesday fall mattered less for its size than its cause.

Company news in focus

British American Tobacco used its capital markets day on Tuesday to lay out a strategic framework it calls Horizon 2030, targeting mid-teens revenue growth from new categories — vapour, heated tobacco and modern oral nicotine — by 2030, with a new-category contribution margin of at least 30% by then. For the current year, however, it said it remains on track to deliver towards the lower end of its 3–5% revenue growth and 4–6% adjusted profit from operations growth ranges, with adjusted diluted earnings per share growth towards the middle of its 5–8% range, all at constant rates. Confirming the lower end of an existing range is not a profit warning, but neither is it the upgrade some had positioned for, and the shares fell.

Headlam Group provided the week's bleakest announcement. The flooring distributor told the market on Wednesday that it would not be able to publish its half-year results for the six months to 30 June by the 30 September deadline required under the Disclosure and Transparency Rules, because of its ongoing administration process. Headlam's shares have been suspended from the Main Market since 1 September, after the company said it intended to appoint administrators having exhausted the liquidity available under its existing financing facility. The suspension stays in place until those results are published.

The Vesuvius approach is now on a clock: under Rule 2.6(a) of the Takeover Code, RHI Magnesita must either announce a firm intention to bid or confirm it will not by 5pm London time on 27 October, a deadline extendable only with Takeover Panel consent.

Earnings and trading updates

Greggs delivered the best-received update of the three sessions. In its third-quarter statement on Wednesday the bakery chain reported total sales up 7.7% in the 13 weeks to 26 September, with like-for-like sales in company-managed shops up 3.4%, an acceleration on the 2.1% recorded in the first half. Management credited new product launches, including iced drinks and relaunched protein salads, alongside more settled weather in August and September. Greggs now expects a modestly improved outcome for 2026, having previously guided to underlying pre-tax profit broadly in line with last year's £172m. It also set out plans to consolidate manufacturing by potentially closing four sites, affecting around 740 roles, for expected annual savings of about £20m by 2028-29. The shares rose as much as 9% and touched a two-month high.

Saga reported interim results for the six months to 31 July on Wednesday and the numbers were striking: underlying pre-tax profit rose 98% to £46.6m from £23.5m, on underlying revenue up 14% to £366.3m. Travel did the heavy lifting, with underlying pre-tax profit there up 45% to £60.3m — Ocean Cruise up 38% to £47.7m, River Cruise up 54% to £6.0m and Holidays more than doubling to £6.6m. The company raised full-year guidance to underlying pre-tax profit of £65m to £70m and said it now expects to reach its medium-term targets of £100m of underlying pre-tax profit and leverage below 2.0 times ahead of the original January 2030 deadline.

Card Factory's first-half results on Tuesday were a quieter affair. Revenue rose 5.3%, helped by the Funky Pigeon acquisition and wholesale growth, but adjusted pre-tax profit fell 3.8% to £12.7m as the company invested in digital integration. Adjusted earnings per share edged up 1.6% to 2.9p and the interim dividend was raised 7.7% to 1.4p. Like-for-like store sales fell 2.0%, though the company said UK store like-for-likes had returned to growth in recent weeks. First-half free cash flow was positive at about £1m, described as the first positive first-half cash result in a decade. Full-year guidance was held and the shares firmed around 3% to roughly 75p.

Macro and the Bank of England

Wednesday brought the week's main domestic data. The ONS revised second-quarter GDP growth up to 0.5%, from an initial estimate of 0.4%, following an unrevised 0.6% in the first quarter, with the upgrade driven mainly by professional, scientific and technical services. The accompanying detail was arguably stronger than the headline: real household disposable income per head rose 1% on the quarter, the largest increase since the end of 2024, and second-quarter business investment growth was revised up sharply to an annual rate of 5.2% from 0.8%. Balance-of-payments figures showed a current account deficit of £19.9bn, well inside the £24.7bn economists had expected; excluding precious metals trade the deficit narrowed to 1.4% of output, the smallest reading in five years, helped by services exports.

On prices, the British Retail Consortium reported that shop price inflation eased to 1.4% in September from 1.5%, below a consensus of 1.5%, with food at 2.5% and non-food at 0.8%. The BRC credited promotions on meat and dairy and discounting on back-to-school ranges, while flagging poor European harvests pushing fruit prices up. Chief executive Helen Dickinson warned that "retailers have absorbed wave after wave of extra costs, but there is a limit to what businesses can shoulder", pointing to higher business rates from April alongside rising employment costs, energy bills and packaging taxes.

None of that has shifted the rate debate much. The Bank of England held Bank Rate at 3.75% on 17 September on a 6–3 vote, and as of Tuesday overnight index swap pricing implied roughly an 83% probability of a hike at the 5 November meeting, up from around 65% a week earlier. Barclays, UBS, J.P. Morgan, Goldman Sachs and Bank of America have all moved to expect a November increase. Gilts firmed over the first half of the week as energy prices eased, and sterling rose 0.27% against the dollar on Wednesday to $1.3266.

Still to come

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