The UK's premier share index, the FTSE 100, has delivered its most impressive annual performance in over a decade and a half, decisively outpacing its main American rival during a year marked by global economic and political volatility.
Record-Breaking Gains and Sector Standouts
From the final trading day of 2024 to the close on December 31, 2025, the blue-chip index climbed by a formidable 1,758.36 points, or 21.5%. This represents the most significant yearly increase since 2009, when it rose 22.1% in the wake of the global financial crash. The index closed the year at 9,931.38, having repeatedly smashed through previous record highs and coming within touching distance of the symbolic 10,000-point barrier.
This stellar run meant the FTSE 100 outperformed key international benchmarks. While France's Cac 40 and the US's S&P 500, which is on track for a 17% annual rise, lagged behind, the UK index's gains were broadly comparable with Germany's Dax.
The charge was led by several heavyweight sectors. Mining shares, particularly precious metal producers, saw extraordinary growth. Fresnillo's share price rocketed approximately five-fold over the year, while fellow gold miner Endeavor Mining's value nearly tripled.
Defence and Finance Join the Rally
In a year of heightened geopolitical tensions, defence giants proved to be robust investments. Both Rolls-Royce and Babcock International saw their share prices roughly double across the twelve months.
The financial sector also rallied powerfully, buoyed by elevated profits and strategic progress. Lloyds Banking Group led the banking surge, with its share price nearly doubling thanks to steady gains throughout 2025.
Dan Coatsworth, head of markets at AJ Bell, commented that the FTSE 100 had precisely the mix that investors sought amidst the uncertainty. "This year’s success for the blue-chip index is not a flash in the pan," he said. "The FTSE 100 has delivered positive returns in eight of the past 10 years, averaging 9.1% annually over that period including dividends."
Resilience Amidst Turbulence and Market Challenges
The index demonstrated notable resilience, attracting investors with steady gains despite a fragile UK economy and political unpredictability that sparked volatility worldwide. This fortitude was tested in early April when markets reeled after former US President Donald Trump announced plans for widespread tariff hikes. The FTSE 100 suffered its largest single-day fall since the onset of the Covid-19 pandemic, mirroring sharp drops on Wall Street, before recovering its losses and resuming its upward trajectory.
However, the year was not without significant challenges for the London market. A notable exodus of companies continued, with several high-profile names leaving the public arena. Insurer Direct Line was delisted following a £3.7bn takeover by Aviva, and drinks maker Britvic was acquired by Carlsberg. Furthermore, Indivior and fintech firm Wise announced plans to shift their primary listings from London to US exchanges.
On a more positive note, IPO activity showed signs of revival. According to PwC analysis, 11 companies listed on the London Stock Exchange in 2025, raising a total of £1.9bn – the highest annual proceeds since 2021.
