Food price rises are expected to lower UK inflation in 2026, with slowing inflation trends reported in late 2025. Unemployment rate in the UK is above 5% and could reach an 11-year high this year, due to weak economic growth. Key UK defense stocks like Rolls-Royce and BAE Systems have shown strong performance in early 2026, building on a successful 2025. The government borrowing in the UK is projected to decrease in 2026, as the country aims to meet fiscal rules ahead of crucial local elections. The GBP is expected to fall against the USD in 2026, with potential volatility due to domestic events and economic uncertainties.

Read more at Morningstar: 5 Charts That Will Define the UK Economy and Markets in 2026