Best FTSE 250 shares to watch in January 2026

Top FTSE 250 stocks to watch now

UK economic outlook and FTSE 250 performance

The UK economy continues to muddle through, neither falling into recession nor generating much excitement. Growth remains modest at best, with GDP figures disappointing more often than not. Consumer spending has held up better than feared, but business investment remains subdued as firms grapple with higher costs and political uncertainty.

Inflation has cooled from its peaks, giving the Bank of England (BoE) room to consider rate cuts. However, services inflation remains sticky, and wage growth continues to run above levels consistent with the 2% target. That complicates the policy outlook and keeps pressure on household finances.

The FTSE 250 has shown surprising resilience despite this mixed backdrop. As a more domestically-focused index than the FTSE 100, it typically struggles when UK growth falters. Yet recent performance has been solid, driven partly by value rotation and partly by specific sectors performing well.

Smaller banks, housebuilders and retailers have all contributed to gains, suggesting investors see scope for improvement ahead. The index has also benefited from M&A activity, with private equity showing interest in mid-cap names trading at depressed valuations.

Whether this performance can continue depends largely on the economic trajectory. A genuine pickup in growth would provide support, but renewed weakness could see the gains quickly reversed. For now, the FTSE 250 is outperforming expectations, even if the fundamental backdrop remains challenging.

Best FTSE 250 shares performance table

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Playtech

Playtech has surged over 25% in the past month, marking one of the strongest performances in the FTSE 250. The gaming technology supplier has benefited from renewed interest in the sector as operators report solid trading heading into year-end.

The rally follows the completion of its financial trading division sale earlier this year. That deal removed uncertainty and left Playtech focused purely on gambling software. The streamlined structure appears to be resonating with investors.

Speculation around potential M&A activity has also helped. Playtech's technology platform makes it an attractive asset, though no concrete bids have emerged. Still, such talk can drive shares higher even without firm offers materialising.

The pace of gains looks stretched now after such a strong run. The question is whether this represents a sustainable rerating or simply a catch-up move after underperformance. Playtech still faces headwinds from regulatory pressures across key markets, which could limit further upside from here.

Playtech weekly candlestick chart

SSP Group

SSP Group has delivered a near-identical gain, rising over 25% as the travel food operator benefits from continued strength in passenger numbers. The company operates outlets in airports and railway stations globally, giving it exposure to the ongoing travel recovery.

Recent trading updates have consistently beaten expectations, with like-for-like sales running ahead of pre-pandemic levels in many locations. Air passenger traffic continues to normalise, while rail travel has picked up as commuting patterns stabilise.

The shares had lagged the broader market through much of 2024 despite solid fundamentals, creating scope for this catch-up rally. Valuation multiples had compressed to undemanding levels given the growth trajectory. That discount has now narrowed considerably.

Management has been active on costs, closing underperforming sites while investing in higher-margin locations. This operational discipline is starting to show through in margin improvement.

SSP Group weekly candlestick chart

Hochschild Mining

Hochschild Mining has rallied over 20% as precious metals prices have found support and production improves. The Peru-focused silver and gold miner has benefited from both operational progress and a more favourable commodity environment.

Gold prices have held near record highs, supported by central bank buying and safe-haven demand. Silver has also performed well, aided by industrial demand expectations. Hochschild's dual exposure to both metals has proven advantageous.

Recent production figures showed solid operational performance across key assets. Cost control initiatives have started to bear fruit, helping to improve margins even as ore grades at some mines moderate.

The shares had been under pressure on concerns about permitting delays and community relations in Peru. Some of those worries have eased, removing a weight from the stock. Political risk hasn't disappeared, but markets appear more comfortable now.

Hochschild Mining weekly candlestick chart

RS Group

RS Group has gained over 17% as the industrial distributor benefits from improving order trends and better margin performance. The company supplies maintenance and repair products to industrial customers globally, giving it exposure to manufacturing activity.

Recent management commentary has been increasingly positive, pointing to stabilisation in key end markets after a challenging period. While overall demand hasn't surged, the trajectory has improved sufficiently to lift sentiment. Destocking pressures that weighed on trading earlier in the year have eased considerably.

The shares had been beaten down through much of 2024 on concerns about industrial recession in Europe and weak manufacturing data from Asia. That pessimism created an opportunity for investors willing to look through the cycle. RS Group maintains a resilient business model even in downturns.

Margin improvement has also supported the rally. The company has worked through cost reduction initiatives while benefiting from a more favourable product mix. These operational gains should provide protection if end market conditions weaken again.

RS Group weekly candlestick chart

Lion Finance

Lion Finance has posted a 15% gain, though the stock trades with relatively light volume and remains one of the smaller names in the financial sector. The move appears driven partly by sector rotation into financials as bond yields have found support.

The company operates in specialist lending and financial services, areas that benefit when interest rate expectations stabilise. After significant volatility in rate expectations through 2024, markets have settled into a clearer view on monetary policy. That stability helps lenders price products more confidently.

Recent results showed steady progress on loan book growth and credit quality metrics within acceptable ranges. Net interest margins have held up better than feared as the company's exposure to floating rate products provides some natural protection.

Lion Finance weekly candlestick chart

How to trade FTSE 250 shares with us

1. Research the FTSE 250 shares you're interested in
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3. Open an account or practise on a demo account
4. Select your opportunity and manage your risk
5. Place your trade and monitor its position

Trading vs investing

Investing in shares takes a long-term approach where you look to build wealth over an extended period. You can invest through our share dealing account.

Trading takes a shorter-term approach where you can benefit from leverage. This is where you place a position far greater than your initial deposit through spread betting or CFD trading.

For example, with 5:1 leverage, you could open a £5,000.00 position while only depositing £1,000.00 as 'margin'. A 10% market movement could result in a 50% gain or loss on your deposited margin.

This approach is high risk, and you can gain or lose more money than you put in. You should consider whether you understand how leveraged products work and whether you can afford to take the high risk of losing money.

Best FTSE 250 shares summed up

Playtech, SSP Group, Hochschild Mining, RS Group and Lion Finance could be five of the best FTSE 250 shares to buy now. These shares are the top returning FTSE 250 stocks in the past month.

Remember past performance is not an indicator of future returns. Market conditions can change rapidly, and share prices can fall as well as rise.

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