Europe bulletin: London stocks rise as VW cuts costs and politics shift

European markets and policymakers opened the week with a mix of cautious optimism and strategic recalibration.

London stocks edged higher as banks rebounded ahead of key UK data that could shape interest-rate expectations, while corporate Europe faced fresh cost-cutting pressures, led by Volkswagen’s sweeping efficiency drive.

In politics, Britain moved to toughen online rules for teenagers as Washington stepped up its diplomatic outreach in Central Europe, underscoring shifting priorities across the region.

London stocks edge higher

London equities nudged higher on Monday as financials rebounded ahead of a data-heavy week that could shape Bank of England rate expectations and steadied after recent sharp volatility.

The FTSE 100 rose about 0.4%, and the FTSE 250 gained roughly 0.4%, with NatWest and Barclays among the top bank performers after last week’s tech-and-AI-driven selloff hit lenders.

Traders are watching January CPI and retail sales, as well as early February factory activity readings, with markets leaning toward a 25-basis-point cut next month.

Midcaps lagged as Pinewood sank after Apax walked away from a $792 million bid, while SkinBioTherapeutics slid on a former-CEO probe.

Volkswagen to cut costs by 20%

Volkswagen is preparing an efficiency drive, aiming to cut costs 20% across all brands by the end of 2028, according to Manager Magazin on Monday.

CEO Oliver Blume and CFO Arno Antlitz outlined the “massive” savings plan at a closed-door meeting with top executives in Berlin in mid-January, the report said.

The push aims to boost returns as VW grapples with a slump in China, US tariffs, and tougher competition.

The company said a group-wide programme launched three years ago has already delivered double-digit billion-euro savings.

Manager Magazin said plant closures were discussed, with an interim update due March 10.

UK to regulate teen social media use

UK Prime Minister Keir Starmer is pushing for broader powers to regulate online access, arguing the government needs to move faster to protect children from fast-changing digital risks.

His office said the aim is to avoid having to pass fresh primary legislation each time technology shifts, even if that means less parliamentary scrutiny of future curbs.

The plans build on a consultation launched last month on an Australian-style ban on social media for under-16s, with Spain, Greece, and Slovenia also weighing similar moves.

The government also wants more AI chatbots covered by a ban on generating sexualised images without consent, following concerns about Elon Musk’s Grok.

Rubio's central Europe push

US Secretary of State Marco Rubio began a two-day swing through Slovakia and Hungary, pitching Central Europe as a bigger pillar of President Donald Trump’s approach to the continent.

He met Slovak President Peter Pellegrini in Bratislava and later held talks with Prime Minister Robert Fico, who visited Trump in Florida last month.

The State Department said Rubio would focus on energy cooperation, bilateral ties, and NATO commitments.

On Monday, he was due to see Hungary’s Viktor Orban, a close Trump ally facing an April election, as Brussels keeps pressing both leaders over democratic backsliding and Russia ties in Europe.