Investor Insights: UK House Price Outlook, Gold and Silver Crash, Magnificent Seven Earnings

In this week’s newsletter:

It’s a hard time to sell a house in the UK right now, what with cold, heavy rain and dark nights contending with upcoming tax rises for higher-end properties. Green shoots may not be visible right now in this metereological gloom but the Halifax’s latest figures for January are consistent with a rebound at the start of the year. We look at the current range of house price forecasts for 2026 in our comprehensive outlook.

Quite a lot depends on how many times the Bank of England cuts interest rates this year. Rates have fallen, but many mortgages are still around 4%, which is rough for those coming off cheap fixes.

At the start of the year, futures markets anticipated just one UK rate cut from the Bank of England in 2026—in April. The latest rate hold on Threadneedle Street—and some accompanying positive sentiment from governor Andrew Bailey—means they have brought that prediction forward by a month, with speculation over a possible second cut in June 2026 growing.

But UK news has really been focused on one thing: The political scandal concerning the prime minister’s approval of Peter Mandelson as US ambassador to Washington. The discussion has now turned to whether Sir Keir Starmer loses power in the fallout. Starmer is seen as a “fiscal moderate” so his exit would move futures markets, gilt yields, and the pound. Bond markets may not like his replacement at all.

IG’s markets analyst Chris Beauchamp says: “A more left-wing leader devoted to higher spending might upset the delicate balance in UK government borrowing markets, leading to higher borrowing costs.”

This will certainly weigh on the thoughts of BoE Governor Andrew Bailey, who may regret saying last week that “we are moving into a more settled world”.

Settled isn’t how we’d describe the precious metals markets. Gold and silver soared, smashing new records, then very quickly unwound January gains at the start of February.

Things are changing quickly in world of stocks too. At the end of January, we discussed reports that Elon Musk’s SpaceX would merge with Tesla. Musk then announced SpaceX would merge with xAI, which owns the social media platform X, instead. A SpaceX IPO is still on the launchpad, however.

For more on SpaceX, and the funds that hold this space exploration business, read Leslie Norton’s analysis here. For the view from the UK, read Sunniva Kolostyak’s article on Baillie Gifford’s exposure here.

Earnings season continues, with some some big names reporting, including Microsoft MSFT, Amazon AMZN and Tesla TSLA. See a full roundup of their results below. In the UK, GSK GSK exceeded Morningstar analyst expectations while, in the communications sector, Vodafone VOD and BT Group BT.A both made headlines for the wrong reasons. Next week, we’ll get full-year results for 2025 from AstraZeneca AZN, Barclays BARC, and BP BP.

Artificial intelligence is once again moving markets, with software and data stocks plunging after the launch of Anthropic’s Claude. Amid all this turmoil, Valerio Baselli’s interview with Polar Capital Global Technology Fund lead manager Nick Evans reveals a contrarian view: That the next AI winners may lie beyond the Magnificent Seven.

As it’s the first week of the new month, we also have our usual lookback at the previous month’s best and worst performing stocks, funds and ETFs.

Ollie Smith, Senior Editor