London’s premier stock index, the FTSE 100, had a stellar year in 2025, surging 21.5% on New Year’s Eve compared to the start of the year. This marked the index’s best annual performance since 2009, outpacing the returns of Wall Street.
The broader all-share market also saw a substantial gain of 19.75% over the same period, reflecting the strength of the UK’s equity markets. Leading the charge were precious metal producers, with Fresnillo’s shares skyrocketing by an impressive 450%, buoyed by record gold and silver prices. Another top performer was Endeavour Mining, which gained 170%.
The telecommunications sector also shone, with Airtel Africa emerging as the second-fastest riser, up 210%. Defence companies also saw a surge in investor interest, as Europe bolstered its military spending amid the Russia-Ukraine conflict and pressure from former US President Donald Trump for NATO allies to allocate more resources to defence.
Babcock International, the defence contractor responsible for outfitting the Royal Navy’s nuclear submarine fleet, jumped by almost 150% this year. Rolls-Royce, a supplier of engines for fighter jets, turbines, and propulsion systems for warships and the British army, doubled in value.
Despite the overall market’s strong performance, not all stocks were winners. More than a fifth of the FTSE 100 constituents experienced declines, with the biggest fallers being the distribution company Bunzl and drinks maker Diageo, both of which lost a third of their value.
Globally, stock markets rallied by 21%, marking their strongest year since 2019 and the sixth annual rise in the past seven years. However, the year was not without its challenges, as the launch of the Chinese chatbot DeepSeek in January wiped $1 trillion from US technology stocks in a “Sputnik moment” for the world’s AI superpower.
The bigger shock came in April when former US President Trump announced sweeping tariffs on trading partners, which temporarily knocked 10% off the FTSE 100 by mid-April. However, a recovery rally followed when the US president decided to pause the new levies.
Towards the end of the year, hopes for US interest rate cuts in 2026 pushed shares higher, with Trump signaling that he would appoint a new head of the Federal Reserve who would lower borrowing costs.
Despite lingering fears of an AI bubble, Wall Street’s S&P 500 was on track to record a 17% rise for 2025, while the Nasdaq gained around 21%. Among tech stocks, Alphabet, the parent company of Google, saw a 65% surge in its share price as its Gemini artificial intelligence product gained market share. In contrast, Meta, the owner of Facebook, lagged behind with a 13% rise, while online retailer Amazon gained only 6%.
The strength of the UK’s equity markets in 2025 is a testament to the resilience and adaptability of British companies, as they navigated the challenges of a turbulent global environment.
