Britain’s stock market experienced a remarkable surge in 2025, achieving a 21.5% increase in the FTSE 100 index of blue-chip stocks by year-end, marking the largest annual gain since 2009. The broader all-share market reflected similar growth, rising by 19.75%. This upward trend aligns with a global rally in stock markets, which collectively gained 21%, indicating the strongest performance since 2019.
Leading the charge in the FTSE 100 was the precious metal producer Fresnillo, whose shares skyrocketed by an astounding 450%. This surge was primarily fueled by record prices for gold and silver throughout the year. Fresnillo’s competitor, Endeavour Mining, also showed significant strength, with a 170% increase in its stock value. Airtel Africa, a telecommunications firm, emerged as the second-fastest riser, witnessing a 210% increase.
The defence sector saw a notable boost as well, driven by increased military spending across Europe amid the ongoing Russia-Ukraine conflict and calls from former President Donald Trump for NATO allies to enhance their defence budgets. Babcock International, which outfits the Royal Navy’s nuclear submarine fleet, experienced a nearly 150% increase in its stock. Similarly, Rolls-Royce, known for supplying engines to fighter jets and power systems for the army, saw its stock value double.
Despite these advancements, more than one-fifth of FTSE 100 stocks experienced declines. Distribution company Bunzl and beverage maker Diageo were among the most affected, each suffering a dramatic 33% drop in their stock values.
The year was marked by significant volatility in global markets. Notably, the abrupt entry of the Chinese AI chatbot DeepSeek into the market precipitated a substantial decline, wiping $1 trillion off U.S. technology stock values in what many referred to as a “Sputnik moment” for AI superpowers. The situation escalated in early April when Trump announced sweeping tariffs on trade partners, which triggered considerable concern and led to a 10% drop in the FTSE 100 by mid-April. However, a rally ensued when Trump decided to pause the proposed tariffs.
As the year progressed, optimism surrounding potential U.S. interest rate cuts in 2026 began to sway market sentiment positively, bolstered by Trump hinting at appointing a new Federal Reserve head aimed at lowering borrowing costs.
Danni Hewson, head of financial analysis at AJ Bell, noted that investors were increasingly looking for value and diversification amidst pressures on the U.S. dollar and ongoing geopolitical instability. Meanwhile, Wall Street was on pace for a 17% increase for 2025, with tech stocks showing mixed results. Alphabet, Google’s parent company, saw a 65% rise attributed to its Gemini AI product gaining market traction. In contrast, Meta, the parent company of Facebook, only managed a modest 13% gain, while Amazon reported a 6% increase.
The U.S. economy faced anxiety, leading to three interest rate cuts since September, resulting in a 9% decline in the value of the U.S. dollar—the worst performance since 2017. Analysts project that further depreciation of the dollar may occur in the upcoming year.
A surge in precious metals prices was noteworthy, particularly gold, which experienced a 65% increase—the best performance for the commodity since 1979, as investors sought refuge amid inflation and geopolitical tensions.
Across Europe, the pan-European Stoxx 600 index reported its best year since 2021, gaining nearly 17%. Germany’s planned increase in government spending, along with better-than-expected economic data, bolstered market performance. Anthi Tsouvali, multi-asset strategist at UBS Global Wealth Management, remarked on the pivotal nature of 2025 for Europe, suggesting an upgraded outlook for European equities to “attractive,” driven by strong early gains related to fiscal stimulus and rising defence expenditures.
