London shares held on to their gains on Thursday, with the FTSE 100 closing up 0.25% at 10,863.09 after a session driven by strong company results and fresh evidence that the UK economy grew faster than expected in the third quarter.

The blue-chip index added 27.62 points from Wednesday's close of 10,835.47. It had climbed further during the morning, touching an intraday high near 10,905, before afternoon profit-taking trimmed the advance. The mid-cap FTSE 250 ended almost flat, down 0.03% at 24,916.84.

Burberry was the standout performer among the UK's largest listed companies. The luxury fashion house closed 8.01% higher at 1,180.50p, having risen as much as 9.4% earlier in the day, after reporting that it had swung back into profit. Pre-tax profit reached £19 million in the 26 weeks to 26 September, compared with a £48 million loss a year earlier, while revenue rose 6% to £1.1 billion.

The company said demand for its signature trench coats helped lift sales, with comparable sales growing 4% in the first half and rising 12% in the Americas and 7% in Greater China. Chief executive Joshua Schulman said five consecutive quarters of growth showed the turnaround strategy launched two years ago was working, and the group said it expected further revenue growth and margin improvement in the year ahead.

Rolls-Royce unveils £1.5bn buyback

Rolls-Royce also supported the index, closing 2.01% higher at 1,369.60p after announcing an additional £1.5 billion share buyback and reaffirming its full-year guidance. The engine maker said strong trading in the second half of 2026 gave it further confidence in underlying operating profit of £4.7 billion to £4.9 billion and free cash flow of £3.8 billion to £4 billion for the year.

The new buyback follows the substantial completion of an existing £2.5 billion programme and forms part of a £7 billion to £9 billion repurchase plan running from 2026 to 2028. Rolls-Royce said its large-engine order backlog stood at around 2,500 engines, while order intake in its Power Systems division jumped 62% in the first nine months of the year, helped by demand for power generation for data centres.

Private equity group 3i Group rose 5.65% after raising its interim dividend, starting a new £750 million buyback and increasing its stake in Dutch discount retailer Action. Housebuilder Barratt Redrow gained 1.47%, while BT Group added 1.50% and National Grid rose 1.52%.

GDP growth supports the rally

The session began with positive economic news. Figures from the Office for National Statistics showed the UK economy grew by 0.7% in the third quarter, its fastest quarterly pace in two years, after growth of 0.5% in the second quarter. The dominant services sector drove the expansion, with output up 0.9%, offsetting a 0.7% fall in construction. Monthly GDP rose 0.2% in September.

Analysts said the combination of blockbuster results from Burberry and B&M, major capital returns from Rolls-Royce and 3i, and resilient growth outweighed weakness among mining shares. B&M European Value Retail was the biggest riser in the FTSE 250, surging 20.93% after reporting a 54% rise in interim pre-tax profit and a return to like-for-like sales growth in its UK stores.

Not all companies shared in the gains. Dr Martens tumbled 14.67% after describing its first-half performance as disappointing, with group revenue down 9% at constant currency. WH Smith fell 6.69% after reporting a drop in full-year profit, while precious metals miners lost ground as gold and silver prices fell. Fresnillo dropped 2.98% and Endeavour Mining fell 8.46% after reporting lower third-quarter gold production.

In commodity markets, Brent crude was up 1% at $93.78 by the London close, while West Texas Intermediate was largely flat at $86.85. European markets also finished higher, with Germany's DAX up 0.41% and France's CAC 40 up 0.34%.

Sources: Sharecast, Alliance News via Morningstar