FTSE 100 Edges Up to 10,505 as Reeves CGT Receipts Hit £24.3bn Record and Retailers Demand £2.60 Parcel Charge

The FTSE 100 closed Wednesday 27 May 2026 up 0.13% at 10,505.01, lifted by the sharp drop in oil prices and broadly resilient corporate earnings. The flat finish masked significant divergences within the index: BP and Shell fell more than 3% each as Brent crude tumbled 4-5% on Iran-US framework deal reports, while travel and leisure stocks rallied sharply, with IAG up 4.2% and easyJet up 3.7%. The FTSE 250 outperformed, gaining 0.6% to close at 22,341.

Reeves CGT receipts hit record

HM Revenue and Customs published data on Wednesday confirming that capital gains tax receipts for the 2025-26 financial year reached a record £24.3 billion — up sharply from £13.7 billion in 2023-24 and well above Office for Budget Responsibility forecasts. The increase reflects Chancellor Rachel Reeves’s October 2024 budget rise in CGT rates, with the headline rate for higher-rate taxpayers moving from 20% to 24%. Treasury sources hailed the figure as vindication of the fiscal strategy, but tax advisers warned the boost has been front-loaded by disposals ahead of feared further rate rises.

Behavioural responses

Investment platforms reported a sharp spike in CGT-triggering disposals in the first quarter of the 2026 tax year, suggesting that part of the receipts boom is a one-off effect rather than a permanent revenue gain. The OBR’s spring 2026 forecast already revised down its CGT receipts assumption for 2027-28 and 2028-29, anticipating that high-net-worth individuals will increasingly restructure to defer or avoid the higher rates. Treasury officials privately acknowledge the risk of revenue erosion in outer years.

Retailers urge small-parcel charge

A coalition of 15 UK retailers, led by Marks & Spencer, Next, JD Sports and the British Retail Consortium, urged Prime Minister Keir Starmer and Chancellor Reeves on Wednesday to impose a £2.60 ($3.50) charge on small parcels imported from outside the United Kingdom. The retailers argue that the current de minimis exemption — which allows parcels worth under £135 to enter the UK without customs duties or VAT being collected at point of sale — gives an unfair advantage to overseas online marketplaces such as Shein, Temu and AliExpress. The proposal echoes a similar move under consideration in the United States and in the European Union.

Bank of England in focus

The Bank of England’s Monetary Policy Committee meets on 18 June, and market expectations have shifted significantly over the past week. Overnight index swaps now price in a 65% probability of a 25-basis-point cut, up from 40% a week ago, reflecting both the sharp move in oil and softer-than-expected April CPI data published last week. Several MPC members, including external member Catherine Mann and internal hawk Megan Greene, are scheduled to speak in the run-up to the decision, providing potential market-moving moments. The two-year gilt yield closed at 3.94% on Wednesday, near a six-month low.

Sterling and the housing market

Sterling firmed modestly to £0.8483 against the euro on Wednesday but fell 0.2% against the dollar to $1.2853. Nationwide Building Society published its monthly house price index on Wednesday morning, showing a 0.3% month-on-month decline and annual price growth slowing to 1.4% — the weakest reading in 13 months. Five-year fixed mortgage rates from the major lenders now average 4.35%, down from 5.05% a year ago. Mortgage approvals data, due on Friday 30 May, will provide further insight into the residential transaction trajectory.

Corporate earnings highlights

Wednesday’s UK corporate earnings calendar was dominated by Marks & Spencer’s full-year results, which delivered a 12% rise in adjusted operating profit to £984 million and a confident outlook on capital expenditure for 2026-27. The retailer’s shares closed up 5.4%, the best FTSE 100 performance of the day. AutoTrader Group also beat consensus, with adjusted operating profit up 7%, while BT Group warned of revenue pressure in its consumer division. Vodafone Group, scheduled to report on Thursday 28 May, is expected to set out its long-awaited German turnaround plan in detail.

Pre-Budget speculation

With Chancellor Reeves’s autumn budget approaching, speculation about further tax rises is intensifying. Conservative Home columnist Katie Lam argued on Wednesday that „price controls set by Governments have a very poor record” — a coded warning against possible Labour interventions in energy and food markets. Tony Blair’s intervention earlier in the day, criticising Labour’s tax trajectory, has further sharpened the political stakes. Treasury officials confirm that a Treasury sub-committee of the Cabinet is now meeting weekly to consider revenue options.

What to watch in the next week

The UK economic calendar offers several market-moving events in the days ahead. Friday 30 May brings the BoE Money and Credit data and Lloyds Business Barometer. Monday 2 June sees the final May Manufacturing PMI, followed by the Services PMI on Wednesday 4 June. Vodafone reports on Thursday 28 May, with Compass Group, AstraZeneca trading update, and Diageo Q4 trading also in the agenda. The 18 June MPC meeting is the most significant single date, and the Tuesday 24 June presentation of the OBR’s Welfare Trends Report will frame autumn budget discussions.