FTSE 100 Closes 2025 with 21 Percent Annual Gain Marking Strongest Performance Since 2009

The FTSE 100 concluded 2025 at 9,931.38 points, registering an annual gain of 21.51 percent and representing the index’s strongest yearly percentage increase since 2009, when it advanced 22.07 percent. The benchmark recorded a total points advance of 1,758.36 during the year, reaching a new intraday high of 9,948 points on the final trading day before settling below the psychologically significant 10,000 level.

The index finished 2025 with a total market capitalisation of approximately £2.4 trillion, according to FTSE Russell data. The performance reflected a volatile year for global markets, though UK equities benefited from gains across several heavyweight sectors despite persistent macroeconomic and geopolitical uncertainty throughout the period.

Trading on New Year’s Eve was characterised by subdued activity, with the abbreviated session seeing modest opening gains of 8 points. The low-volume environment was typical of the holiday period, with limited corporate news flow and reduced market participation dampening volatility.

US equity markets provided a mixed backdrop, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all closing modestly lower on Tuesday. The decline extended a late-December pullback that followed a technology-led rally earlier in the month, as investors reassessed expectations for monetary policy in 2026.

Minutes from the Federal Reserve’s December meeting revealed divisions amongst policymakers regarding the decision to implement a quarter-point interest rate reduction. The documentation indicated that the rate cut was closely contested, with several officials suggesting that rates may need to remain unchanged for an extended period unless inflation demonstrates continued moderation. The cautious tone from the central bank helped to temper risk appetite across markets, whilst participants recalibrated expectations that the Federal Reserve could pause further rate reductions early in the new year.

The strong annual performance of the FTSE 100 provides a solid foundation as UK equities enter 2026, though market participants will be monitoring developments in monetary policy, inflation trends and geopolitical risks that could influence the trajectory of British blue-chip stocks in the months ahead.