Today’s Exchange Rate Update
As of 11:00 a.m. on 4 January 2026, the real-time market exchange rate of the British pound against the Chinese yuan stands at 1:9.4144. The impact of hawkish rate cuts continues to weigh on the currency. Meanwhile, UK GDP data for the fourth quarter of 2025 showed economic growth of 0.2%, below expectations. The manufacturing PMI has remained in contraction territory for three consecutive months at 48.2, offering little support for sterling.
Key Events This Week
Prime Minister Keir Starmer delivers New Year address
Illegal migration reaches the “second-highest level on record”
FTSE 100 surges past the 10,000-point milestone
Cold air moves south, bringing first snowfall across the UK
UK Cabinet debates digital ID scheme for babies
01 Prime Minister Starmer Delivers New Year Address
On the evening of 31 December 2025, UK Prime Minister Keir Starmer delivered his New Year address, highlighting the multiple challenges facing the country in recent years and stressing the need to build consensus to overcome long-standing development difficulties.
Starmer acknowledged that progress on reforms has fallen short of expectations, noting that many of the challenges are the result of long-term structural issues that require sustained effort. He outlined key policy priorities for 2026, including freezing rail fares, prescription charges and fuel duty, as well as raising wage standards to provide tangible relief in household bills, community safety and healthcare services.
He also reflected on the pressures faced in 2025, including slowing economic growth and fluctuations in public opinion polls, reaffirming the government’s commitment to delivering on its promises and restoring public confidence.
The address prompted responses from opposition parties. Conservative leader Kemi Badenoch criticised weak economic growth, rising taxes and elevated unemployment in 2025, pledging to support businesses and improve economic conditions through increased investment in public services.
Liberal Democrat leader Ed Davey referenced local election planning, while Reform UK leader Nigel Farage argued that both Labour and the Conservatives had failed to seize opportunities presented by developments such as artificial intelligence, calling for a stronger focus on technology-driven growth.
02 Illegal Migration Reaches Second-Highest Level on Record
On 1 January 2026, media outlets including the BBC and The Guardian reported that more than 41,000 illegal migrants successfully reached the UK in 2025. While this figure was slightly lower than the 45,000 recorded in 2022, it remains among the highest levels in recent years.
Despite strengthened border controls and increased coastal patrols, some migrants continue to attempt dangerous crossings of the English Channel and the North Sea in small boats, often departing from southern areas of northern France. These vessels are frequently overcrowded, posing significant risks.
Migrant support organisations noted that official figures only account for those who successfully arrived in the UK, excluding individuals who made multiple attempts, turned back mid-journey, or went missing.
In 2025, at least 29 migrants died in the surrounding waters, a figure that does not include deaths in migrant camps or during overland attempts. Some missing individuals are known only through reports from relatives, with their whereabouts remaining unknown.
As 2026 begins, several rescue organisations have called on the UK and France to improve reception policies and management practices at the border, ensure basic living conditions for migrants, and halt violent enforcement measures. Spokespeople have reported increasing militarisation of border management and multiple incidents involving the use of rubber bullets.
Nevertheless, illegal crossings in the Calais region have continued despite winter conditions and heightened regional tensions.
03 FTSE 100 Breaks Through the 10,000-Point Milestone
On 2 January 2026, Reuters reported that the UK’s FTSE 100 index surpassed the 10,000-point mark during the first trading session of the year, marking a significant milestone in the history of the British stock market. The index rose sharply at the open, reaching an intraday high of 10,046 points before easing slightly below the threshold.
In 2025, the FTSE 100 posted gains of more than 21%, outperforming major US indices. Strong performances from UK consumer brands, precious metals miners, defence contractors and financial services firms were key drivers of the rally.
Analysts noted that around three-quarters of FTSE 100 constituents generate revenues overseas. Rising gold and silver prices in 2025, alongside increased global defence spending, supported mining and defence stocks, with index performance reflecting broader global market trends.
Market participants widely view the 10,000-point breakthrough as a psychologically important level, particularly amid concerns over high valuations in US technology stocks. The FTSE 100’s diversified sector composition has made it an attractive option for investors seeking stable returns. UK Chancellor Rachel Reeves described the milestone as a sign of market confidence.
However, experts cautioned that failure to realise expected earnings growth driven by artificial intelligence could still trigger market volatility and price corrections.
04 Cold Snap Brings First Snowfall Across the UK
On 3 January 2026, the UK Met Office issued multiple warnings for snow and ice, set to remain in place until Monday (5 January). At the same time, the UK Health Security Agency (UKHSA) extended an amber cold weather health alert across England until 6 January.
Reports indicated that Scotland was the first to experience heavy snowfall, particularly in northern areas such as Angus and Perth and Kinross. Orange snow warnings remained in effect until midday on 3 January, with low-lying areas receiving 10 to 20 centimetres of snow and occasional blizzard conditions.
Yellow snow and ice warnings were also issued for southwest England, the east coast of England, much of Wales and large parts of Northern Ireland.
Meteorologist Rebecca said the cold conditions, driven by Arctic air masses and northerly winds, are expected to persist from Saturday into early next week, with overnight temperatures in some areas potentially falling into double-digit sub-zero territory.
05 UK Cabinet Debates Digital ID Scheme for Babies
On 1 January 2026, UK media reported that Cabinet members had recently held internal discussions on the feasibility of introducing digital identity markers for babies.
The talks are understood to be an extension of the UK’s broader digital ID programme. In September last year, Prime Minister Starmer proposed the introduction of digital IDs to address illegal migration, requiring jobseekers to prove their legal right to work in the UK. The inclusion of infants in the discussion suggests the scope of the scheme could be further expanded.
The meeting was chaired by Cabinet Office Secretary Simon Case, who noted that beyond basic identity verification, such digital IDs could also be used for purposes such as registering social media accounts for young people.
Buy a property in the UK with a team of professionals who know the UK property market best｜ Lansha Group
Founded in 2014 and headquartered in Paddington, London, Lansha Group has become one of the top 100 seafarers in the industry in the past 10 years, providing one-stop services for international property. We have many years of professional experience in dealing with all aspects of the property market, from choosing a property to opening a home, loans, solicitors, tenancy management and second-hand property sales. We provide 24-hour real-time service to our global clients, assisting them in dealing with the cumbersome formalities of property purchase and home inspection, so that they can move into their homes or invest in them with peace of mind. If you are looking to invest in the UK, Lansha Group has a professional investment team to assist you in selecting the best properties, analysing the housing information and regional development, and making a comprehensive assessment to choose the ideal home. Visit Lansha Group's website now to view our selection of properties and choose your dream home!
If you have any questions about buying a property in the UK, please feel free to contact us directly.
