The UK’s benchmark index, the FTSE 100, delivered its strongest annual performance since 2009, rising 21.5% in 2025 as global investors rotated into UK blue-chip stocks. The rally was driven by sharp gains in mining, financials, defence and energy, helping London equities outperform many global peers.
The index ended the year at 9,931.38 points, up 1,758 points, after hitting multiple record highs and briefly testing the 10,000-point milestone. The figures are based on year-end market data and early January 2026 trading sessions.
Key Highlights of 2025 Performance
- Annual gain: +21.51%, one of the strongest years on record
- Outperformance: Beat the S&P 500 (≈17% gain)
- Peers: Stronger than many European benchmarks; FTSE 250 rose ~9%
- Market value: Lifted combined FTSE 100 market capitalisation toward £2.4 trillion
The rally came despite sluggish UK economic growth, elevated inflation and political uncertainty, underlining the index’s heavy exposure to globally diversified earnings.
What Drove the Rally
Commodity and Mining Boom
Surging prices for gold, silver and base metals boosted miners as investors sought inflation hedges amid geopolitical uncertainty.
Financial Sector Strength
Banks and insurers delivered robust profits, supported by higher interest rates, resilient balance sheets and low loan defaults.
Defence and Industrial Upswing
Rising global defence spending and NATO commitments lifted contractors and engineering groups.
Currency Tailwind
A weaker pound enhanced overseas earnings, crucial for an index where 70–80% of revenues are generated abroad.
Investor Rotation
Capital flowed out of expensive US technology stocks into undervalued UK “value” shares amid renewed trade-tariff concerns.
A sharp dip in April, triggered by US tariff announcements, proved short-lived, with the index rebounding more than 30% from those lows.
Top FTSE 100 Performers in 2025
- Fresnillo: +400%+
- Airtel Africa: +200%+
- Endeavour Mining: +170%+
- Babcock International: +150%
- Antofagasta: +100%+
- Rolls-Royce: +100%+
Around 20 constituents ended the year lower, but gains were unusually broad across the index.
Early 2026 Update: Momentum Meets Volatility
The rally extended into early 2026, with the FTSE 100 briefly closing above 10,000 points in early January. As of mid-January, the index has traded around 10,100–10,200, though renewed tariff fears and global sell-offs have triggered bouts of volatility.
Outlook: What to Watch in 2026
- UK economic growth and inflation trends
- Corporate earnings sustainability
- Bank of England interest-rate cuts
- Trade policy and geopolitical risk
- Sector rotation between cyclicals and defensives
Most analysts expect more moderate returns in 2026, but many still view the FTSE 100 as attractively valued relative to global peers.
