The UK stocks driving the FTSE 250 rally
Key Points
- The FTSE 250 closed above 24,000 points for the first time in early August 2026, up around 9% since the start of the year.
- Mid-cap companies are more exposed to the UK economy and interest rates than the international giants of the FTSE 100.
- Private equity firms and overseas buyers have taken over Mitie, Rotork, Tate & Lyle, Spire Healthcare and EasyJet this year.
- Funding Circle, Clarkson, Keller and Hill & Smith have beaten the index and won bigger-than-average profit upgrades from analysts.
- Housebuilders have lagged the rally as hopes of interest rate cuts fade.
The FTSE 250 broke above its 2021 peak in the first week of August 2026, closing above 24,000 points for the first time after adding around 2,000 points, or 9%, since the start of the year.
The index tracks the 250 largest London-listed companies below the FTSE 100, and its constituents tend to earn their money at home rather than abroad. That makes their fortunes far more sensitive to the state of the UK economy and to interest rates than the multinationals at the top of the market.
Anyone holding a UK equity fund, a workplace pension or a mid-cap tracker owns a slice of these businesses.
Expectations of lower interest rates drove the early part of 2026, but the US-Iran conflict and higher energy costs have pushed those hopes back. Interest rate sensitive sectors have suffered as a result, with housebuilders in particular languishing while the wider index climbed.
Foreign buyers have kept coming regardless and a combination of private equity firms and overseas companies have turned the FTSE 250 into a hunting ground this year, taking over Mitie, Rotork, Tate & Lyle, Spire Healthcare and EasyJet.
UK mid-caps trade well below their own historical averages and below international rivals when measured against the profits they generate.
The stocks driving the rally
Analysis by AJ Bell shows the companies that have beaten the FTSE 250 by at least 10% over the past six months and have also seen analysts raise their profit forecasts by more than the index average.
The second test matters because it points to businesses that are trading better, rather than shares that have simply run up in price. Raspberry Pi, whose shares have more than doubled this year, missed the cut because its forecast upgrades fell short of that bar.
| Company | What it does | Why it made the list |
|---|---|---|
| Funding Circle | Lends to small and medium-sized British businesses | Half-year revenues up 50% to £138 million and pre-tax profit of about £28 million |
| Clarkson | Shipping services and freight broking | Shares up 30% this year on trade disruption in the Strait of Hormuz |
| Keller | Ground engineering for construction projects | Told the market full-year operating profit would land materially ahead of forecasts |
| Hill & Smith | Road safety barriers and infrastructure products | Raised its profit guidance twice on double-digit growth in the United States |
Funding Circle lends to small and medium-sized British companies, and its shares climbed after strong first-half results on 16 July. Revenues grew 50% to £138 million while pre-tax profit came in at around £28 million, against £6 million in the first half of 2025. The lender expects at least £235 million of revenues and £35 million of pre-tax profits for the full year.
Clarkson, which arranges shipping and freight deals, has gained 30% this year after telling investors that full-year results would land materially ahead of expectations. That usually signals profits between 5% and 10% above forecasts.
The closure of the Strait of Hormuz has driven up freight rates and demand for chartering, and analysts have raised their average forecast for the year to December 2026 by roughly a tenth in the past month and 13% over 12 months.
Keller, the world’s largest ground engineering contractor, also reached new highs after flagging full-year operating profit materially ahead of expectations. The company’s own compilation of analyst forecasts puts operating profit at £223 million on revenues of £3.2 billion for the year to December 2026.
Hill & Smith makes road safety barriers and other infrastructure products, and it lifted its full-year profit guidance to the top of the analyst range after trading beat expectations in the three months to 30 April.
Stronger first-half results on 12 August prompted a second upgrade, driven by double-digit growth in its American businesses. The company now expects underlying operating profit to come in modestly ahead of its previous forecast, with a slightly better margin than 2025.
