The Ftse 100 has enjoyed its strongest year since the aftermath of the financial crisis, beating major global markets despite wider economic and political uncertainty.
Gains were driven by strong performances from mining, defence and banking stocks, which led the rally through 2025.
The UK’s biggest stock market index gained 1,758.36 points, or 21.5 per cent from the last trading day of 2024 to December, 31 2025.
This was the biggest increase since 2009 when the FTSE 100 climbed by 22.1 per cent in the aftermath of the damaging global financial crash.
Closing 2025 at 9,931.38, the index shot past record high levels on multiple occasions through the year and teetered close to surpassing the 10,000 mark.
This marks the fifth consecutive year of positive returns for London's premier stock gauge.
Mining companies, precious metals producers, defence firms and banking stocks have powered this year's exceptional performance.
The surge in gold prices throughout 2025, combined with a weakening US dollar, created favourable conditions for many of the internationally-focused businesses listed on London's top-flight index.
The City has outperformed Wall Street, with the S&P 500 posting a comparatively modest 17.2 per cent gain over the same period.
|GETTY/GOOGLE
For the first time in years, the City has outperformed Wall Street, with the S&P 500 posting a comparatively modest 17.2 per cent gain over the same period.
Europe also lagged behind, as the pan-European STOXX 600 rose by 16.6 per cent across the year.
Hopes of further Bank of England interest rate cuts, combined with the attraction of UK shares as a relatively cheap diversification option during a period of global uncertainty, helped draw investors back to British equities after a long spell of underperformance.
Markets are due to close at 12.30pm ahead of the New Year’s Day bank holiday
| GETTYTrading was quieter on Wednesday morning, with markets due to close at 12.30pm ahead of the New Year’s Day bank holiday.
The shortened session brought little in the way of company news, with thin volumes as investors wound down for the festive break.
Danni Hewson, head of financial analysis at AJ Bell, highlighted how the international composition of London's leading index shielded it from the sluggishness affecting the more domestically oriented FTSE 250.
European markets had delivered strong annual returns
| GETTY"Investors have been looking beyond the usual suspects for value and diversification as the US dollar came under pressure and the world continued to be beset with geopolitical turmoil and fears of an AI bubble," she said.
Ms Hewson added that European markets had delivered strong annual returns, with recent gains likely to sustain momentum heading into 2026.
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