Introduction to the FTSE 100
Britain’s flagship stock index had its best year since 2009 after a string of record-breaking days. The Financial Times Stock Exchange (FTSE) 100 ended the year up 21.5% compared to the start of the year. This means the share price of listed companies in the FTSE 100 has seen its biggest annual rise in 16 years.
Composition of the FTSE 100
The FTSE 100 comprises the hundred most valuable companies listed on the London Stock Exchange. Notable participants include lenders such as Barclays, Natwest, HSBC, and Lloyds, as well as supermarket chains Tesco, Marks & Spencer, and Sainsbury’s. The index also largely consists of mining and international oil and gas companies.
Record-Breaking Performance
There have been a number of record-breaking moments for the UK benchmark index over the course of the 12 months, most recently on December 30th. According to the London Stock Exchange Group (LSEG), there were 41 all-time high closes for the FTSE 100 in 2025.
Factors Contributing to the Rise
The price was boosted by the pound’s temporary weakness during the year, making buying sterling-listed shares good value for money, as is typically the case with FTSE 100 companies. Many of the mining giants have performed well as minerals such as gold, silver, and copper hit new highs. Investors poured money into the metals because they were considered safe investments while markets were volatile. The Bank of England’s promise of interest rate cuts also contributed to the FTSE 100’s rise.
Comparison with Other Indices
The UK’s top index also outperformed its peers in Europe and the US. France’s CAC 40 index gained more than 10% in 2025, while the pan-European Stoxx 600 gained almost 16%. The German DAX also rose by 21.5%. After a year in which technology company valuations soared as investors sought to capitalize on the expected boom in artificial intelligence (AI), Wall Street’s S&P 500 rose 17%.
Year-End Performance
Despite hovering close to the symbolic 10,000 mark, the FTSE 100 failed to reach that milestone and ended the year at 9,931. The S&P 500 is the U.S. index that includes companies that are believed to be stable and profitable and includes the top-performing “Magnificent 7” technology companies. The Magnificent 7 includes the world’s most valuable company, the AI chip maker Nvidia, as well as Tesla, Amazon, Apple, Meta, Microsoft, and Google’s parent company Alphabet.
