What's happened
The FTSE 100 rose 21.5% in 2025, its best year since 2009, outperforming European and US markets despite UK economic and political uncertainties. Key sectors included mining, defence, and finance, with notable gains in gold, silver, and defence stocks. Several companies delisted or moved listings abroad, but IPO activity increased.
What's behind the headline?
The 2025 surge in the FTSE 100 underscores the disconnect between UK economic fundamentals and stock market performance. The index's gains were primarily driven by sectors with international exposure, such as mining and defence, which thrived on rising commodity prices and geopolitical tensions. The strong performance of gold and silver miners like Fresnillo and Endeavor Mining reflects investor flight to safe assets amid volatility. Meanwhile, the delisting trend—exemplified by companies like Britvic and Indivior—suggests a shift in corporate strategy, possibly influenced by global listing preferences and valuation considerations.
This divergence indicates that the UK stock market's resilience is increasingly decoupled from domestic economic health, relying instead on sector-specific tailwinds and global investor sentiment. The rise in IPO activity signals a renewed confidence in the London market, despite ongoing political and economic headwinds. Looking ahead, sustained sector performance and continued international revenue streams will be crucial for maintaining growth, but the UK economy's underlying weaknesses could pose risks to long-term stability. Investors should remain cautious of overexposure to sectors benefiting from temporary geopolitical or commodity price boosts, as these may not translate into sustainable economic growth.
What the papers say
The Independent highlights the FTSE 100's record-breaking year, driven by strong gains in mining, defence, and finance sectors, despite UK economic challenges. Sky News emphasizes the index's outperformance relative to European and US markets, noting the influence of a weak pound and rising metals prices. The Guardian offers a broader perspective, pointing out the index's decoupling from UK economic health and the impact of sector-specific factors like defence spending and commodity demand. Al Jazeera adds that non-US markets, especially in Asia, also saw significant gains, driven by global trade uncertainties and shifts away from US dominance, which contextualizes the UK market's performance within a broader international trend.
How we got here
The FTSE 100's strong performance in 2025 occurred amid global and domestic uncertainties, including political instability, trade tensions, and economic stagnation in the UK. Despite this, the index benefited from sector-specific boosts, such as rising metals prices and defence spending, and was driven by international revenue streams for many constituents. The year also saw a wave of companies delisting or relocating listings, though IPO activity rebounded to levels not seen since 2021.
Go deeper
Common question
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Why Did the FTSE 100 Perform So Well in 2025?
The FTSE 100's record-breaking year in 2025 has raised many questions. Despite UK economic and political uncertainties, the index surged by 21.5%, its best year since 2009. What factors drove this impressive growth? How does this compare to previous years? And what does it mean for UK investors? Below, we explore the key reasons behind the FTSE 100's remarkable performance and what it signals for the future.
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