FTSE 100 Hits Record, But Consumer Confidence Collapse Could Cripple Gains

• The FTSE 100 touched a fresh all‑time high, driven largely by a mining rally.
• Consumer confidence slipped to a three‑month low, dragging on market breadth.
• Mining giants like Anglo American and Rio Tinto outperformed, while Melrose & Hays posted double‑digit losses.
• Sector spill‑over effects could reshape exposure to peers such as Tata Steel and Adani Enterprises.
• Historical patterns suggest record highs can precede sharp corrections when sentiment sours.

You thought a record FTSE 100 guaranteed a bull run—think again.

Why Mining Stocks Drove the FTSE 100 to New Heights

The FTSE 100 closed at 10,914.18, a fresh benchmark, with mining names delivering the bulk of the upside. Anglo American, Antofagasta, Rio Tinto, and Glencore each posted gains between 1% and 1.8%, buoyed by higher commodity prices and robust demand from China and Europe. The sector’s price‑to‑earnings (P/E) multiples remain modest, offering a defensive cushion in a volatile macro environment. For investors, this mining thrust underscores a broader shift: energy‑transition metals such as copper and nickel are now core growth engines, not just cyclical playbooks.

Consumer Confidence Slide: A Hidden Drag on Market Momentum

While the index celebrated a record, the GfK Consumer Confidence Barometer revealed a dip to –19 in February, the lowest in three months and worse than the –15 consensus forecast. A falling confidence index signals reduced household spending, which can erode earnings for consumer‑facing firms like Burberry, JD Sports, and Vodafone. The metric also feeds into the Bank of England’s inflation outlook—weak demand may temper price pressures, but it can also prompt policy tightening if wages stay stagnant. In short, the confidence collapse is a silent brake on the rally.

Earnings Winners and Losers: Who’s Riding the Wave?

RightMove surged 4.2% after unveiling higher‑than‑expected revenue and a fresh share‑buyback, reinforcing its position in the UK property market. Airtel Africa and Fresnillo also posted solid gains, reflecting strong regional demand and stable dividend yields. Conversely, Melrose (owner of GKN Aerospace) plunged 13% after warning that 2026 revenue would fall short of expectations, raising concerns over aerospace spending amid geopolitical tensions. Recruiter Hays slumped 10% after a sharp first‑half earnings decline, highlighting the fragility of the labour‑market services sector when confidence wanes.

Sector Ripple Effects: What Competitors Like Tata and Adani Are Watching

The mining rally in the UK mirrors a similar surge in Indian and Australian markets where Tata Steel and Adani Enterprises have benefited from higher iron‑ore and coal prices. Both companies are expanding capacity to lock in long‑term contracts, a strategy that could pressure UK miners to accelerate their own projects. Moreover, the commodity price spike feeds into steel‑intensive sectors—construction firms, automotive OEMs, and infrastructure developers—potentially lifting earnings across the board. Investors should therefore monitor cross‑border supply‑chain dynamics, not just domestic earnings.

Historical Parallel: Record Highs Followed by Confidence Crashes

Looking back, the FTSE 100 in 2018 reached a record while the UK consumer confidence index fell sharply after the Brexit vote. The market corrected 8% over the next quarter as retailers and travel firms reported weaker sales. A similar pattern unfolded in 2020 when the index briefly topped 7,000 amid a pandemic‑induced rally in tech, only to tumble as consumer sentiment collapsed. The recurring theme: a confidence dip can precede a sector‑wide pullback, especially for discretionary and services stocks.

Investor Playbook: Bull vs Bear Cases on the FTSE 100

Bull Case

• Continued commodity price strength keeps mining ETFs and individual miners in favor.
• Buyback programmes from RightMove and IAG provide near‑term price support.
• Potential policy stimulus from the Bank of England if inflation eases, boosting equity valuations.

Bear Case

• Persistently low consumer confidence drags earnings for consumer‑discretionary names.
• Revenue miss from Melrose signals broader aerospace sector weakness.
• Currency pressure on the pound against the euro could hurt exporters and increase import costs.

Bottom line: The FTSE 100’s record is a double‑edged sword. Mining strength offers a solid foothold, but the underlying confidence erosion could trigger a sector rotation. Position wisely, balance exposure, and keep a close eye on the next consumer‑confidence reading.