Europe bulletin: FTSE 100 flat as inflation rises, EU freezes Mercosur deal, NCC sells Escode

Markets and geopolitics collided on Wednesday as European assets struggled to find direction.

The FTSE 100 stalled despite pockets of strong earnings, while intensifying trade tensions linked to President Donald Trump and Greenland rattled banks and industrials.

Sticky UK inflation further clouded the Bank of England policy outlook, even as dealmaking, trade disputes, and tariff brinkmanship reshaped the broader European economic landscape.

FTSE 100 remains muted as earnings momentum clashes with geopolitics

London’s blue-chip index flatlined on Wednesday as a seesaw battle unfolded between solid corporate earnings and escalating trade friction over Greenland.

The FTSE 100 remained essentially unchanged at 10,997 points by midday, having shed three consecutive sessions on the back of Trump’s tariff threats aimed at European nations resisting his territorial ambitions.

Banking and industrial stocks bore the brunt of investor anxiety, sliding 0.9% and 2% respectively as the Greenland saga intensifies.

Yet bright spots emerged: Rio Tinto surged 5% on stellar quarterly production metrics, while Burberry climbed 5% on robust holiday season sales.

Mining stocks broadly benefited from safe-haven metals demand. Data showing UK inflation unexpectedly accelerated to 3.4% in December complicated the Bank of England’s rate-cut outlook.

NCC Group offloads Escode in £275M deal

Manchester-based cybersecurity firm NCC Group inked a definitive agreement Wednesday to divest its Escode software escrow division to private equity juggernaut TDR Capital, the Asda owner, for £275 million ($369.4 million).

The transaction, expected to close by April 30, seals NCC’s exit from non-core operations and clears the decks to position itself as a dedicated cyber resilience business.​

Escode, which generated £66.5 million in revenue with buoyant 71.4% gross margins over the past twelve months, represents 13 consecutive quarters of constant-currency growth.

NCC expects net proceeds of £262.4 million post-transaction costs, unlocking a major shareholder return window alongside a concurrent £70 million share buyback launched immediately.

EU parliament escalates Mercosur battle

Europe’s lawmakers dealt a stunning blow to Brussels’s flagship Mercosur trade deal Wednesday, voting 334-324 to haul the contentious pact into the EU Court of Justice.

The razor-thin margin, just ten votes, reveals Parliament’s internal schism over the $700-million-consumer-bloc accord with Argentina, Brazil, Paraguay, and Uruguay.

France-led farmers succeeded in weaponizing procedural machinery against the agreement, which was inked Saturday after two decades of negotiations.

The legal referral could trigger a two-year judicial slog, effectively freezing ratification while the court examines whether the Commission circumvented member-state parliaments by splitting the deal’s trade and investment components.

Farm lobby fears about cheap beef and sugar inundating European markets drove the rebellion, though German automakers and industrial interests view the accord as essential geopolitical ballast against Trump’s tariff assault.

Trump holds Swiss tariff gains hostage

At Davos on Wednesday, President Trump confirmed the framework agreement with Switzerland slashing tariffs from 39% to 15%, but added an ominous caveat: rates could climb right back up if Bern doesn’t cooperate.

The language carries trademark Trump unpredictability, keeping Swiss executives nervous even after securing the $200 billion investment commitment through 2028.

Trump’s warning arrives amid escalating European friction over Greenland.

While he pledged no military takeover, he upped pressure on the EU by announcing 10% reciprocal tariffs on eight European nations refusing to sell, threatening 25% by June.

Switzerland’s lower 15% rate, matching EU treatment, now looks contingent on continued Swiss goodwill on investment flows and negotiations.

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