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Why did the FTSE 100 perform so well in 2025?
The FTSE 100's strong performance in 2025 was driven by sector-specific factors such as rising metals prices, increased defence spending, and growth in finance stocks. Despite UK economic challenges, international revenue streams for many companies and a weak pound boosted exports and profits, helping the index reach new heights.
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Which sectors contributed most to the UK stock market's growth?
Mining, defence, and finance sectors were the main drivers of the FTSE 100's growth in 2025. Gains in gold, silver, and defence stocks played a significant role, supported by global trade uncertainties and increased demand for commodities and defence products.
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How does this year's performance compare to previous years?
The 21.5% rise in 2025 marks the best year for the FTSE 100 since 2009. It outperformed both European and US markets, highlighting its resilience despite domestic uncertainties. This year’s gains are notable given the economic and political challenges faced by the UK.
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What does this mean for UK investors?
For UK investors, the record year suggests opportunities in sectors like mining, defence, and finance. However, it also indicates the importance of international revenue streams and sector-specific factors. Investors should consider how global trends and currency movements impact their portfolios.
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Will the FTSE 100 continue to perform well in 2026?
While past performance is not a guarantee of future results, the factors that boosted the FTSE 100 in 2025—such as commodity demand and defence spending—may continue to influence the index. However, economic and geopolitical uncertainties remain, so investors should stay informed about global developments.