UK Stock Market Today: FTSE 100 Flat, Mid‑Caps Slide as Risk‑Off Mood Opens December

LONDON, 1 December 2025 – The UK stock market began December on a cautious note, with Britain’s blue‑chip FTSE 100 hovering just below record territory while mid‑cap shares led the downside amid a global shift away from risk assets.

By early afternoon, the FTSE 100 was trading around 9,718, essentially flat on the day, while the more domestically focused FTSE 250 had fallen about 0.8%, putting it on track for its sharpest one‑day fall in two weeks. ^[1]

Behind the headline numbers, the session was defined by:

Profit‑taking in industrials, defence stocks and homebuilders
Strong gains for gold and precious‑metals miners as bullion hit a six‑week high
Ongoing fallout from last week’s tax‑raising UK budget
Investor focus on upcoming US and UK central bank decisions in December

FTSE 100 Today: Defensive Heavyweights Keep the Index Near Record Highs

Despite the cautious tone, the FTSE 100 index remains only about 2% below the all‑time high it set in November, when it briefly flirted with the symbolic 10,000‑point level. ^[2]

Market data from Hargreaves Lansdown’s live board showed the index at 9,717.95, down just 0.03% on the day, underlining a broadly sideways session for blue‑chips. ^[3]

Analysts at IG noted that November marked the fifth consecutive monthly gain for the FTSE 100 – its best run since 2021 – even though the final monthly advance was a modest 0.1%. That winning streak has been driven largely by the index’s “defensive” mix of consumer staples, pharmaceuticals and commodity producers, which has helped the UK benchmark outperform in bouts of global volatility. ^[4]

Within today’s trade:

Gold and precious‑metals miners – including Fresnillo and Hochschild – surged more than 5% in places, tracking a jump in bullion prices. ^[5]
Consumer staples such as Unilever and Reckitt traded firmly higher, while large diversified miners like Glencore and Anglo American also gained ground. ^[6]

These gains helped offset weakness in more cyclical sectors and underpinned the FTSE 100’s resilient performance compared with continental peers.

FTSE 250 and Cyclicals Under Pressure

The real pain in London was found further down the market‑cap scale. The FTSE 250 dropped around 0.8%, heading for its biggest one‑day decline in roughly two weeks as investors rotated out of economically sensitive UK names. ^[7]

A Reuters‑sourced breakdown showed: ^[8]

Aerospace & defence:
- Rolls‑Royce fell about 3%
- BAE Systems slipped close to 2.8%
Homebuilders and construction‑linked names:
- Bellway, Balfour Beatty and Taylor Wimpey all lost more than 1.5%
Engineering and industrials also declined, in line with a broader European sell‑off in the sector.

One standout corporate story was the infrastructure space:

HICL Infrastructure climbed around 4.4%
The Renewables Infrastructure Group (TRIG) dropped about 3–4%

The moves followed news that HICL had abandoned a proposed merger with TRIG that would have created the UK’s largest listed infrastructure investment vehicle, with combined net assets above £5.3bn. ^[9]

The aborted deal removed uncertainty for HICL investors but weighed on TRIG, which had previously been seen as the consolidator in the tie‑up.

Macro Backdrop: Soft Services, Better Manufacturing

Domestic economic data did little to reassure equity investors.

A closely watched survey showed that Britain’s services sector shrank at the fastest pace in three years over the three months to November, underlining pressure on consumer‑facing and business‑services firms. Meanwhile, manufacturing PMI rose for the first time since September 2024, a tentative sign that the long‑suffering industrial sector may be starting to stabilise. ^[10]

Taken together, the data paint a picture of:

Weak domestic demand, hitting services hardest
Nascent improvement in manufacturing, which could ease the drag from industry in 2026 if sustained

Markets are also positioning around the Bank of England’s next move. Earlier commentary in late November suggested money markets now assign a high probability to a rate cut at the BoE’s December meeting, as inflation cools and growth slows. ^[11]

That prospect supports rate‑sensitive areas such as housebuilders and financials in the longer term, but near‑term uncertainty is keeping volatility elevated.

Global Risk‑Off Mood: Defence Stocks Hit, Gold Shines

London’s cautious start reflected a broader global pattern.

Across Europe, the STOXX 600 index slipped about 0.2% by mid‑morning, giving back part of November’s fifth straight monthly gain. Industrial stocks were the biggest drag, falling around 1.1%, as investors booked profits in Airbus, defence contractors and other cyclicals after a strong run. ^[12]

Key European moves reported by Reuters and the Associated Press included: ^[13]

Airbus down roughly 3% after recalling thousands of A320 jets for a software fix
A defence‑sector index down about 2.5%, with names like Hensoldt and Rheinmetall sliding over 3%
Germany’s DAX falling around 0.7–1.5% and France’s CAC 40 down around 0.5–0.9% depending on the time snapshot
Britain’s FTSE 100 underperforming slightly, off around 0.1–0.2% at midday Europe time

At the same time, gold prices hit a six‑week high, with spot gold trading near $4,256 an ounce and silver touching a record around $57.86. Traders cited renewed expectations of a US Federal Reserve rate cut in December and a weaker dollar – with futures markets pricing the odds of a cut at roughly 88%. ^[14]

Those precious‑metal moves fed directly into the London equity session, explaining why Fresnillo, Hochschild and Endeavour Mining featured among the FTSE 100’s top risers. ^[15]

Risk appetite was also dented by turmoil in cryptocurrencies. An Associated Press wrap noted that bitcoin has fallen by nearly a third from record highs reached in early October, including a drop of more than 17% in November and another sharp fall early on Monday. ^[16]

UK Politics: Starmer Defends Tax‑Raising Budget

Domestic politics remained firmly in the background of today’s trading.

In a press conference in London, Prime Minister Keir Starmer defended last week’s budget, saying he was “proud” of the package and insisting that the public had not been misled over the scale of the fiscal challenge. ^[17]

Key budget points highlighted by Reuters included: ^[18]

£26bn of tax rises, while freezing income tax rates
A pledge to tackle child poverty and protect public services, alongside building a larger fiscal buffer
Mounting criticism from opposition parties, who accuse Chancellor Rachel Reeves of overstating a supposed “fiscal black hole”
Growing questions about the broader economic impact of higher tax rates ahead of 2026–2027

For markets, the message is mixed:

The budget has added to concerns about medium‑term growth and corporate tax burdens
But investors also see fiscal discipline and stability as supportive for gilts and sterling over time

So far, the FTSE 100’s sector mix – heavy on exporters, commodities and defensives – has helped cushion the impact of political noise, though domestically exposed names in real estate, retail and mid‑caps remain sensitive to changing perceptions of the budget’s impact.

Technical Picture: Futures Point to an Intact Uptrend

Despite today’s wobbles, technical indicators suggest the broader uptrend in UK equities remains intact.

Real‑time data for the FTSE 100 December 2025 futures contract showed prices around 9,733, up a fraction on the day, with a trading range between approximately 9,708 and 9,751 in early afternoon London time. ^[19]

Investing.com’s technical dashboard indicates: ^[20]

Relative Strength Index (RSI 14) around 52, signalling neither overbought nor oversold conditions
All major moving averages (5‑, 10‑, 20‑, 50‑, 100‑ and 200‑day) pointing to “Buy”, with prices trading above these levels
A combined technical summary of “Strong Buy” across indicators and moving averages on the daily timeframe

This suggests that:

The primary trend for the FTSE 100 future is still upward
Today’s flat performance could be viewed as a pause or consolidation after a strong multi‑month run
Short‑term volatility is more likely to reflect macro headlines and positioning rather than a clear breakdown in the technical trend

Traders will be watching whether the index can retest November’s highs and potentially make another attempt at the 10,000‑point milestone if global risk sentiment stabilises later in the month.

What Analysts Are Saying About UK Stocks in December

Away from intraday moves, a flurry of commentary and stock‑picking pieces published today paints a nuanced picture of UK equity opportunities as 2025 draws to a close.

1. Big‑Cap Performance and Valuations

A feature on The Motley Fool UK calculates how a £20,000 lump sum invested in the FTSE 100 at the start of 2025 has grown substantially, reflecting robust double‑digit returns for the index this year. Some individual constituents have delivered gains approaching 300%, underscoring the index’s leverage to a small group of star performers. ^[21]

Yet the same analysis argues that UK blue‑chips still trade on undemanding valuations compared with US peers, thanks to higher dividend yields and lingering investor scepticism towards the UK market. That combination continues to attract long‑term income investors, particularly in sectors such as energy, banking and insurance.

A companion article from the same outlet singles out a high‑yield FTSE 100 name to watch before year‑end, emphasising the appeal of dividend yields well above 7% and strong cash flows despite macro uncertainty. ^[22]

2. Rolls‑Royce, Barclays and Legal & General in Focus

UK‑focused commentary on Yahoo Finance and The Motley Fool highlights the extraordinary share‑price moves in some household names: ^[23]

Rolls‑Royce: One piece notes that £5,000 invested in Rolls‑Royce at the start of 2025 is now worth a multiple of that amount, after the shares posted quadruple‑digit percentage gains over the year. Today’s 3% decline looks more like profit‑taking after a remarkable run than a fundamental shift in the story. ^[24]
Barclays: Another analysis points out that Barclays shares have almost tripled in two years, transforming long‑term returns after a sluggish previous decade. The author stresses that while the valuation still appears modest versus global peers, investors should be prepared for heightened volatility as the market reassesses UK rate expectations and bank profitability. ^[25]
Legal & General: A separate piece highlights Legal & General’s near double‑digit dividend yield, noting heavy interest from retail investors hunting for income. The trade‑off, analysts warn, is exposure to market swings in its asset‑management and annuity businesses if growth disappoints or yields spike again. ^[26]

3. Small Caps, Penny Stocks and Dividend Ideas

Fundamental research platform Simply Wall St published a string of UK‑focused notes today, reflecting growing interest in more niche parts of the market: ^[27]

“Promising UK Penny Stocks To Watch in December 2025” argues that recent declines in the FTSE 100 and FTSE 250, partly tied to weak Chinese trade data, have obscured pockets of value among smaller companies with strong balance sheets and cash flows.
“Exploring Undiscovered Gems in the UK for December 2025” suggests investors are increasingly turning to less globally exposed small caps to reduce reliance on macro swings and trade tensions.
“Top UK Dividend Stocks To Consider in December 2025” highlights high‑quality income names that may offer relative stability amid volatility, echoing the theme seen in Legal & General and other big yielders.

Collectively, these pieces reinforce a common narrative:

2025 has been a breakout year for some UK shares, but analysts still see selective opportunities across blue‑chips, mid‑caps and small caps – particularly where valuations remain depressed and dividend streams are robust.

Key Themes for UK Investors as December Begins

Pulling today’s news, data and analysis together, several themes stand out for anyone watching the UK stock market:

“Calm on the surface, rotation underneath”
- The FTSE 100 looks quiet on the day, but under the hood we see a clear rotation out of cyclicals and defence into precious‑metals miners and consumer staples. ^[28]
Macro mixed signals
- Weak services vs. improving manufacturing complicates the growth outlook.
- Expectations of BoE and Fed rate cuts support valuations but also raise questions about the underlying strength of demand. ^[29]
Policy uncertainty lingers after the budget
- Starmer’s defence of his tax‑raising budget and the political row around Chancellor Reeves add a layer of headline risk that particularly affects UK‑focused mid‑caps and domestically sensitive sectors. ^[30]
Global risk‑off but no panic
- Crypto weakness, soft Asian data and slumping European defence stocks are pushing investors towards safe havens like gold, but UK equities remain well supported by defensive giants and record‑high levels for several star performers. ^[31]
Technical uptrend intact
- Futures pricing and technical indicators still point to a bullish medium‑term trend for the FTSE 100, even if the index needs time to digest this year’s strong gains before making a fresh run at 10,000. ^[32]

Outlook: Can the FTSE 100 Stage a December “Santa Rally”?

With November’s rally now behind them, traders are looking ahead to a cluster of catalysts in December:

The Bank of England’s meeting and updated guidance on inflation and growth
The US Federal Reserve’s rate decision, which could cement or derail global risk appetite
Holiday‑season spending data from Black Friday and Christmas, crucial for UK retailers and consumer‑exposed names ^[33]

If rate‑cut hopes remain intact and macro data avoid major disappointments, several banks and brokers suggest there is room for a late‑year “Santa rally” in global equities – a view echoed in some US‑focused technical notes published today. ^[34]

For the UK specifically:

The FTSE 100’s high‑dividend, value‑tilted profile could remain attractive in a falling‑rates environment.
The FTSE 250 and UK small caps may offer greater upside if recession fears ease – but also carry higher risk if services PMIs continue to slide. ^[35]

Final Word

Today’s session underlines that the headline index is only part of the story. While the FTSE 100 appears calm, investors are aggressively reshaping portfolios beneath the surface – favouring defensives, gold and income stocks over high‑beta cyclicals.

As ever, these developments are informational, not a recommendation to buy or sell any security. Individual investors should consider their own objectives and risk tolerance and, where appropriate, seek independent financial advice.