Britain’s blue-chip stock index has risen through the 9,000-point mark to touch a new record high.
The FTSE 100 share index hit 9,016.98 points in early trading on Tuesday, taking its gains during 2025 to more than 10%.
Analysts said the London stock market has benefited from a range of factors this year, including a move by some investors to diversify away from US shares due to concerns over Donald Trump’s economic policies.
The US president’s trade war has also helped UK stocks, as Britain is one of the few countries to have reached a trade deal guaranteeing lower tariffs.
AJ Bell investment analyst Dan Coatsworth said: “With the UK having already reached an agreement on a 10% tariff for trade with the US, with exemptions for certain industries, the country is now seen to have an advantage in terms of trade relations.”
In recent years, the London stock market has been derided as a “Jurassic Park” index, due to its reliance on companies in long-established industries and a shortage of fast-growing tech companies. However, that has proved an asset in uncertain times.
“The UK stock market is the calming cup of tea and biscuit in an uncertain world. There’s nothing fancy on offer, just reliable names that do their job day in, day out. That’s an underrated characteristic and a reason why investors are finally warming to the UK stock market’s appeal in 2025,” Coatsworth added.
However, Trump’s trade war has created choppy conditions in financial markets throughout 2025. The FTSE 100 index fell as low as 7,544 points in early April, when tariff announcements sent shares tumbling. It then recovered sharply, as traders embraced the ”Taco trade” – the idea that Trump always chickens out if his policies spook investors.
Precious metals producer Fresnillo has been the top riser on the FTSE 100 so far this year, up by 155%. It has benefited from surging prices, with gold hitting several record highs this year and silver trading at a 14-year peak this week.
The prospect of higher military spending has pushed up shares in defence contractor Babcock by 120% this year, with BAE Systems up 66%. Engineering firm Rolls-Royce has gained 75%, as its turnaround plan has yielded results.
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John Moore, wealth manager at RBC Brewin Dolphin, said “strong earnings momentum in the banking and defence sectors” had helped push the FTSE 100 to a record high.
Moore also credited the UK’s “relative political stability”. “While there may be tax increases to come, which was part of the reason for the sell-off of the pound in early June, the government has a clear mandate and tenure for the next few years.
“That compares favourably to other parts of Europe, even, where coalition governments are having a tough time,” he said.
