Closing post
Time to wrap up…
US inflation moderated in January to 2.4%, an easing after Donald Trump’s tariffs triggered price fluctuations last year.
Prices rose 0.2% from December to January, according to data released by the US Bureau of Labor Statistics on Friday measuring the consumer price index (CPI), which measures the price of a basket of goods and services. Core CPI, which strips out the volatile food and energy industries, went up 0.3% over the month.
A trio of bank bosses have been handed huge pay packets in the latest sign that the vast salaries and bonuses handed to Wall Street and City of London executives in the run-up to the 2008 financial crisis have started to return.
NatWest on Friday revealed a £6.6m pay package for its boss, Paul Thwaite, marking the largest payout for a chief executive of the banking group since his disgraced predecessor Fred Goodwin took home £7.7m in 2006.
Details of Thwaite’s pay deal came hours after the US lender Citigroup announced that its chief executive, Jane Fraser, had been paid a record $42m (£31m) for 2025. That included a $1.5m base salary and a $40.5m bonus, helping push her overall pay up by almost a quarter from $34.5m a year earlier.
Lloyds Banking Group also announced it had handed its chief executive, Charlie Nunn, a 20% rise in pay for 2025 to £7.4m, which included £4.4m in bonuses. That was the highest sum in a decade.
The boss of P&O Ferries owner, DP World, has left the company after revelations over his ties with the sex offender Jeffrey Epstein forced the ports and logistics company to take action.
Dubai-based DP World, which is ultimately owned by Dubai’s royal family, announced Sultan Ahmed bin Sulayem’s departure as the group’s chair and chief executive on Friday.
Sulayem – the brother of Mohammed Ben Sulayem, the head of the FIA, which governs the world’s motor sport championships including Formula One – has been under intense pressure after the publication of messages with Epstein.
Key events
Stellantis relaunches diesel cars and vans – reports
Alex Daniel
Stellantis has reportedly relaunched several diesel cars and vans across Europe, as part of a costly retreat from electric vehicles that it says is in response to customer demand.
The European-based carmaker, which owns marques including Peugeot, Fiat, Jeep and Citroën, reintroduced diesel versions of at least seven models late last year, Reuters reported.
These include the Peugeot 308 and the premium DS No. 4 hatchback, alongside a range of passenger vans – though only the DS No. 4 has been relaunched as a diesel car in the UK.
A spokesperson for Stellantis said it “remains committed to electrification,” but added:
Our goal is to build a relevant offer to our customers, giving them what they want and what they need.
Based on that, the company also offers some diesel engines in its product portfolio. For instance, in response to sustained customer demand, we have decided to reintroduce it on some models such as DS No. 4.”
Stellantis admitted last week that it had “overestimated” the pace of the shift to EVs and revealed a €22bn (£19.1bn) charge, after lacklustre sales and governments on both sides of the Atlantic walking back emissions targets.
Demand in the US has collapsed after the Trump administration withdrew a $7,500 (£5,527) consumer tax credit, and moved to repeal emissions standards for cars and trucks. Europe has also watered down its targets, despite stronger EV sales, allowing combustion engines to remain on sale for longer.
There aren’t huge moves in the US stock market so far, as investors digest the latest inflation figures. The blue chip S&P 500 stock index has slipped 0.08%, while the Dow Jones Industrial Average is down 0.03%.
Futures for the US stock market, which will open in less than half an hour, are now up slightly after weaker than expected inflation in January.
While investors are taking some confidence from the inflation data, Stuart Clark, a portfolio manager at the investment firm Quilter, warns that there are still some “difficult decisions” ahead for the Federal Reserve.
After a stronger than expected jobs print earlier this week, inflation has fallen more than expected to 2.4% year-on-year, with core inflation rising 2.5% – approaching five years above the 2% target.
Lower gas prices were the key driver to bringing inflation down more than expected, but how long this downward trajectory remains to be seen. Tariffs continue to cause prices to fluctuate, while President Trump wants a hot economy heading into the midterms, so we still see inflation pick up once again.
This is all leaving a cloudy picture for monetary policy setters. Recent months has seen the Fed focus more on the employment data as concerns began to present themselves that the labour market was faltering. On the surface, the payrolls number earlier this week put some of that to bed, but under the surface things remain volatile and as such there is no easy path when it comes to interest rates.
While the continued downward trend towards target will undoubtedly be used to encourage the Fed to cut rates sooner rather than later, and opens the door to Kevin Warsh being more accommodative to President Trump when his term begins, it is by no means a foregone conclusion that the US needs easier monetary policy at this point in time.”
US interest rate cuts ‘on the cards’ in 2026
Weaker than expected inflation for January is starting to feed expectations that the Federal Reserve could cut interest rates this year.
Isaac Stell, investment manager at the broker Wealth Club, says:
US inflation has surprised to the downside, showing disinflationary progress is the US is on track and that rate cuts could well be on the cards as we move through 2026.
Economic conditions in the US are currently showing signs of improvement in the form of solid GDP growth and a stabilising labour market. These latest positive inflation figures mean that if the disinflation trend continues, policy makers are likely to ease rates as 2026 progresses. Bond markets are currently pricing in two cuts for 2026, starting in May, which would bring interest rates down to a range of 3.00-3.25%, a level at which many analysts deem to be a sensible neutral rate.
With tariff related goods inflation expected to peak in the first half of the year and rental inflation set to continue to normalise, the signs look positive for inflation to continue its downward trend. In the near term however, policy makers may deem it appropriate to keep rates steady for a couple more meetings whilst they continue to survey incoming data and make sure the disinflation seen today, is the start of a trend and not just a blip.”
The Trump administration has put unprecedented pressure on the Fed chair, Jerome Powell, to cut rates, with Donald Trump launching personal attacks on Powell and the justice department opening a criminal investigation into his handling of the refurbishment of the central bank’s offices. The FOMC has 12 voting members and meets eight times a year to set interest rates.
US inflation lower than expected at 2.4%
US inflation for January came in lower than expected, at a year-on-year rate of 2.4%, in a sign that price pressures are easing for Americans.
The consumer price index (CPI) figure for January marked a deceleration compared with a rate of 2.7% in December and slightly lower than expectations of 2.5% among economists polled by Reuters.
US CPI MISS: US Inflation cools to 2.4% YoY (vs 2.5% exp), defying fears of re-acceleration after this week’s hot jobs report.
The Breakdown:
•Headline: 2.4% (Lowest since May)
•Core: 2.5% (Slowest since Mar ’21)Driver: Core Services (yellow bars) remains the sticky factor.… pic.twitter.com/5OX5F0TOyi
— Michael McDonough (@M_McDonough) February 13, 2026
Core inflation, which does not include food and energy prices, slowed to to 2.5%, in line with expectations.
It comes after official figures on Wednesday showed the US economy added 130,000 jobs last month, well ahead of forecasts. Last month the Federal Reserve held interest rates at a range of 3.5 per cent to 3.75 per cent, following three consecutive quarter-point cuts.
UK inflation running at about 2.5%, says Bank of England economist
Inflation in the UK is running at about 2.5%, Huw Pill, the chief economist at the Bank of England, has said.
Speaking at an event hosted by the bank Santander in London, he said:
I think when we look at where we are now, short of something happening, underlying inflation is going to be two and a half percent, once we take that half percentage-point impact from the budget out of the forecast we have for April/May,.
The Bank has said it expects inflation to fall to about 2% in April or May.
Last week Pill voted with a narrow majority to keep interest rates on hold at 3.75%. He reiterated his view that the cooling of inflation pressures in Britain was not complete and said the outlook for businesses’ wage and price-setting plans was like a “shallow saucer”.
In order to complete that (disinflation) process, monetary policy has a part of play and that means we do need to retain some restrictiveness in the stance of monetary policy until that process of disinflation is complete.
He added he did not expect “a collapse” in economic activity and that much of the recent rise in unemployment could be due to structural factors.
A top lawyer at Goldman Sachs has also recently left her job after emails in the latest tranche of Epstein files revealed she had a close relationship with the convicted child sex offender , who she called “Uncle Jeffrey”.
Kathy Ruemmler said she would step down as the bank’s chief legal officer and general counsel at the end of June.
She told the Financial Times, which first reported her departure:
I made the determination that the media attention on me, relating to my prior work as a defence attorney, was becoming a distraction,”
Ruemmler’s resignation marks a U-turn for the bank’s top lawyer, having initially insisted she would not resign from the job she has held since 2020.
DP World boss leaves post after Epstein connection revealed
The boss of Dubai-based logistics group DP World, Sultan Ahmed Bin Sulayem, has left his post after revelations over his ties with the paedophile Jeffrey Epstein.
The company named Yuvraj Narayan as chief executive officer and Essa Kazim as chairman, the Dubai Media Office said on X on Friday. Both positions were previously held by Bin Sulayem.
DP World announces the appointment of Essa Kazim as Chairman of its Board of Directors and the appointment of Yuvraj Narayan as Group Chief Executive Officer.
— Dubai Media Office (@DXBMediaOffice) February 13, 2026
Bin Sulayem led DP World, a multinational ports and logistics enterprise with operations spanning more than 80 countries.
Documents released by the US Department of Justice revealed that he emailed Epstein in 2015 that he met a girl “two years ago” that went to an American university in Dubai was “the best sex I ever had amazing body”.
“She got engaged but now she back with me,” he said.
DP World owns six ports in Canada, the London Gateway container port, as well as P&O which it acquired for £3.3bn in 2006. It came under fire in 2022 when the P&O Ferries business fired 800 staff and replaced them with cheaper agency workers.
European markets are subdued this morning – the FTSE 100 is now down very slightly by 0.01%, and the pan-continental Europe Stoxx 600 index is down by 0.34%. That loss is being led by the basic materials sector, which is down 1.43%.
The French IT company Capgemini is a bright spot, with its shares rising by 4.9% after it beat its own target for full-year revenue, up 3.4% at constant exchange rates to €22.5bn (£19.25bn) in 2025. Net income slipped 4% to €1.6bn.
But all eyes will be on the US when the market opens in a few hours, as investors grapple with concerns about how AI could disrupt various industries.
Mohit Kumar, an economist at the investment broker Jefferies, thinks some of the fears might be overblown.
He said:
We do not agree with the frenzy, but we also know not to stand in the way of position unwinds and flows. Hence, we would not be stepping in to fade the recent weakness.
We believe that the current market is more nuanced and requires more detailed bottoms up approach to identify winners and losers. AI disruption is not a negative.
…Companies which could show cost advantages from AI would be the winners while companies where the revenue stream is getting impacted would be losers.
For now, we would recommend investors investing time and effort in identifying winners and losers, and keep powder dry rather than try not to fade the recent weakness.
Russian central bank delivers surprise rate cut
The Russian central bank has cut its key interest rate by a half a percentage point to 15.5% on Friday, in a surprise move as the country tries to shore up its slowing economy.
The move was predicted by just eight of the 24 analysts polled by Reuters ahead of the decision.
The bank said in a statement:
The Bank of Russia will assess the need for a further key rate cut at its upcoming meetings depending on the sustainability of the inflation slowdown and the dynamics of inflation expectations.
The baseline scenario assumes the average key rate to be in the range from 13.5% to 14.5% per annum in 2026. This means that monetary conditions will remain tight.”
Russia’s economy has come under strain from high borrowing costs, after the central bank increased the interest rate last year to fight inflation. Growth has slowed amid falling oil prices – a key source of government revenue – as well as Western sanctions.
The Russian government has forecast growth of 1.3% this year, after 1.0% in 2025. The central bank estimates growth of around 0.5-1.5% this year.
The bank said:
The upward deviation of the Russian economy from a balanced growth path is decreasing…Growth in domestic demand will moderate in the coming months. Business sentiment demonstrates the same expectations.”
Gold is recovering today too, up 1.1% at $4,973.1 per ounce, gaining back some ground after dropping by about 3% yesterday.
The yellow metal came under pressure after data released on Wednesday showed the US job market began 2026 on firmer footing than expected, reinforcing the view that policymakers may keep interest rates elevated for longer.
Higher interest rates can make gold less attractive to some investors, as the metal does not pay a yield. Gold will be one to watch later this afternoon when the US releases inflation data for January.
US and Taiwan finalise deal to cut trade tariffs
Donald Trump has signed a trade deal with Taiwan that will reduce almost all of its tariffs and unlock billions of dollars worth of investment in the US chip industry.
It formalises an agreement between Washington and Taipei announced in January, lowering tariffs on Taiwanese goods from 20% to 15%.
US trade representative Jamieson Greer said in a statement:
President Trump’s leadership in the Asia-Pacific region continues to generate prosperous trade ties for the United States with important partners across Asia, while further advancing the economic and national security interests of the American people.”
The Taiwanese government said the new tariff rate set allows its companies to compete on a level field with Japan, South Korea and the European Union. It also said the agreement “eliminated” the disadvantage from a lack of a free trade.
Taiwan also pledged to invest about $250 billion in US industries, such as computer chips, AI applications and energy, as the US bolsters its semiconductor supply chains and ramps up investment in American manufacturing.
The FTSE 100 is still holding up this morning, up 0.13% as it recovers from some of the AI fear trade that has dominated the stock market this week.
Neil Wilson, investor strategist at Saxo Markets, says that a broad AI fear trade is taking place, touching most parts of the market – apart from those that are more sheltered from the disruption: materials, energy and staples.
The 3-month chart below shows a “broadening bull market”, Wilson says, with trackers for materials (XLB), energy (XLE), consumer staples (XLP) and industrials (XLI) all rising.
While Anthropic’s legal AI tool triggered a sell-off in software and analytics businesses this month, fear is starting to spread to other sectors too – shares in trucking and logistics companies have plunged after the launch of a new AI tool in the sector.
The announcement about the performance capability of Algorhythm’s SemiCab platform, which it claimed was helping customers scale freight volumes by 300% to 400% without having to increase headcount, sparked an almost 30% surge in the company’s share price on Thursday.
But its impact sent the Russell 3000 Trucking Index – which tracks shares in the US trucking sector – down 6.6% on Thursday, with CH Robinson Worldwide plunging 15% by the close of trading, having been down as much as 24%.
You can find my colleague Mark Sweney’s full story here:
Paul Thwaite is now best-paid NatWest boss in decades
Kalyeena Makortoff
Paul Thwaite is now the highest earning CEO at NatWest Group since his disgraced predecessor Fred Goodwin was handed £7.7m in the lead-up to the financial crisis (and, let’s not forget, its £45bn bailout) in 2006.
I asked during the earnings media call this morning whether Thwaite was comfortable with his new £6.6m pay package for 2025, and whether it was an appropriate moment to be returning to pre-financial crisis pay levels.
This was Thwaite’s response:
The first thing I’d say is that I recognise that senior roles in financial services, in banking and actually in wider professional services, are very well paid. I appreciate that. I know that, I believe I’m very fortunate, and it would be churlish for me to suggest otherwise.
The exec pay policy is set by the board, It’s voted on by shareholders. There’s obviously a very close link between reward and performance. And it goes up and down depending upon performance. So that’s all I’ll say on that, really.
I’ve been here a long time and very proud of what we’ve achieved over the last couple of years as the bank. We have a fantastic team and we’re trying to make sure we support the UK economy, and that’s where all my time and energy goes.”
Aluminium prices slip after report Trump ‘plans to roll back’ some tariffs
The price of aluminium has slipped this morning as investors digest reports that Donald Trump could roll back some tariffs on aluminium and metal goods.
The contract on the Shanghai Futures Exchange dropped 1.76% to close daytime trading at 23,195 yuan ($3,355.27) a tonne. The benchmark three-month aluminium on the London Metal Exchange also dipped, down by as much as 1.18% to $3,063.50 a tonne.
The UK’s blue-chip FTSE 100 is up 0.34% early doors this morning, led by software and analytics giant Relx. Its shares are up by about 3.6%, recovering slightly from a brutal sell-off this month triggered by fears around the launch of plug-in legal products from the AI business Anthropic to its Claude Cowork office assistant.
Relx shares are looking a bit better this morning, at about £21.37 apiece, but the new Claude tool has still shaken investor confidence: analysts at both Bernstein and Deutsche Bank have cut their target prices for the stock. DB has reduced from £37 to £30.50, while Bernstein has cut from £43.45 to £34.50, according to Reuters.
NatWest profits up 24% after securing biggest deal since 2008
NatWest has beat expectations this morning with a 24% rise in pre-tax profit to £7.7bn last year.
The results come days after the bank announced a £2.7bn deal to buy Evelyn Partners, one of the biggest wealth managers in the country and NatWest’s biggest deal since its government bailout in 2008.
Matt Britzman, a senior equity analyst at the investment broker Hargreaves Lansdown, says the results will be reassuring for investors after a rocky week for its share price.
Result beat expectations across the board, with profits coming in 10% ahead. The standout was lending income, while tighter cost control and lower bad-loan charges gave profits an extra lift.
The balance sheet also looks healthier, with capital ticking up (though there was a benefit from the smaller-than-hoped buyback announced earlier in the week). Looking ahead, management’s 2026 outlook looks cautious rather than ambitious, but that’s typical for NatWest and leaves room for upgrades as we move through the year.”
He does however note that there is still a question mark around the price tag for Evelyn Partners.
Buybacks are still on the cards, but at a reduced level for the time being. The push for lucrative non-interest income shouldn’t come as a surprise, and while the price may feel lofty, the strategic rationale looks solid.”
Introduction: Trump plans to dial back tariffs on metal and aluminium goods – reports
Good morning and welcome to our rolling coverage of business, the financial markets and the world economy.
Donald Trump is reportedly planning to scale back some of his trade tariffs on steel and aluminium goods.
The US president announced tariffs of up to 50% on steel and aluminium imports last year, including goods made from those metals such as washing machines and ovens.
The Financial Times has reported this morning that the Trump administration is reviewing the list of products affected by the tariffs, and plans to exempt some of those items.
The US would instead launch more targeted national security probes into specific goods, the FT reports, citing three unnamed people familiar with the matter.
These people told the FT that US trade officials believe the tariffs are hurting consumers by raising prices for goods within the US.
It comes as Americans increasingly say they are struggling with the cost of living, with more than 70% reporting in October that their monthly costs had risen by between $100 and $749. The FT cites a Pew Research Center poll from January that suggests roughly 7 in 10 US adults rate economic conditions in the country as fair or poor.
Elsewhere this morning, NatWest has just posted its full-year earnings, which show its boss Paul Thwaite has secured an annual pay package of £6.6m, a 33% increase compared with the year prior.
It comes a year after the bank privatised and lifted its banker bonus cap. Thwaite is not the only banker enjoying a purple patch at NatWest – its committee agreed to a 2025 bonus pool of £495m for its staff, 10.8% higher than the 2024 bonus pool of £446.6m.
The agenda
-
7am GMT: Earnings from NatWest, Capgemini
-
10am GMT: Eurozone trade data
-
1pm GMT: Moderna earnings
-
1:30pm GMT: US inflation for January
-
Munich security conference
