Britain's FTSE 100 delivered its strongest performance since the 2008 financial crisis, surging 21.5% in 2025 to close at 9,931.38 points. The blue-chip index outperformed Wall Street's S&P 500 and most European rivals, defying broader UK economic weakness and political uncertainty.
The remarkable rally added 1,758.36 points from the final trading day of 2024 through year-end. Only 2009 saw a stronger gain, when the FTSE climbed 22.1% following the financial crisis. By comparison, the S&P 500 rose roughly 17% this year, while Germany's Dax matched the FTSE's pace and France's Cac 40 lagged behind.
Mining, defence, and finance sectors drove the gains. Precious metal producer Fresnillo saw its share price soar roughly five-fold, while gold miner Endeavor Mining jumped nearly three-fold. Defence firms Rolls-Royce and Babcock both roughly doubled on the back of geopolitical tensions. Lloyds Banking Group nearly doubled as bank stocks rallied on elevated profits.
Trump tariffs trigger turbulence
The year's momentum hit a sharp snag in early April, when US president Donald Trump announced sweeping tariff plans. The FTSE 100 suffered its biggest single-day drop since the start of the Covid-19 pandemic, mirroring steep declines in the S&P 500 and Dow Jones.
Dan Coatsworth, head of markets at AJ Bell, said the index «has had precisely the right ingredients desired by investors in a year full of political, trade and market uncertainty». He noted: «This year's success for the blue-chip index is not a flash in the pan.»
Exodus from London continues
Despite the FTSE's strength, 2025 saw a string of high-profile departures from the London Stock Exchange. Aviva acquired Direct Line in a £3.7 billion takeover that delisted the insurer, while Danish brewing giant Carlsberg bought drinks maker Britvic. Drug maker Indivior, which shifted its primary listing to Nasdaq last year, announced plans to fully delist from London. British fintech Wise planned to switch its primary listing to New York.
International Distribution Services, Hargreaves Lansdown, and industrial group Spectris were all taken private through buyout deals.
Yet 2025 marked a turnaround for new listings. Eleven IPOs raised £1.9 billion on the LSE, the highest proceeds since 2021, according to analysis by PwC.
Coatsworth emphasized the index's long-term appeal: «The FTSE 100 has delivered positive returns in eight of the past 10 years, averaging 9.1% annually over that period including dividends. This kind of performance reinforces the attraction of investing over the long term. There may be years when performance disappoints, but history suggests it's worth pursuing.»
Note: This article was created with Artificial Intelligence (AI).
