UK Stock Market Today: FTSE 100 Hovers Near Record High as Rate-Cut Hopes Offset Weak UK Data (5 December 2025)

London, Friday 5 December 2025 — The UK stock market is edging higher today, with the FTSE 100 trading around 9,725, up roughly 0.15–0.2% by late morning. That leaves the blue‑chip index just shy of its recent record closing high, as investors weigh gloomy UK economic data against growing confidence that both the Bank of England (BoE) and US Federal Reserve will cut interest rates this month. ^[1]

Key points about the UK stock market today

FTSE 100 trades around 9,725, up about 0.15–0.2% and roughly 1.9% below its record high, extending a strong year-to-date gain near 19%. ^[2]
European shares are modestly higher, helped by strong basic-resources stocks as copper prices hit new highs, while global equity benchmarks head for a second straight week of gains. ^[3]
BoE rate-cut expectations for the 18 December MPC meeting remain front and centre, as markets price a cut from 4.0% to 3.75% and further easing in 2026 amid weak UK construction and jobs data. TechStock²
Domestic indicators flash warning signs: UK construction PMI plunged to 39.4, house prices stagnated in November and in‑store sales barely grew, underscoring pressure on growth. TechStock²+1
Stock movers include Ocado, surging on a $350m settlement with Kroger; Rolls‑Royce, JD Sports, and miners such as Anglo American and Antofagasta also trade higher, while BP and some defensives lag. ^[4]
An upcoming FTSE index shake‑up will see British Land promoted to the FTSE 100 and WPP relegated to the FTSE 250 from 22 December 2025. TechStock²+1
Technical analysts say the FTSE 100 remains in a bullish range above its 100‑day moving average, with key support around 9,610–9,686 and resistance near 9,750–9,850 — levels that could define any “Santa rally” in coming weeks. ^[5]

FTSE 100 and FTSE 250: Slight gains, still near records

Real‑time data show the FTSE 100 around 9,725 points, up about 0.15–0.16% on the day, while futures trade a touch higher. ^[6] Earlier in the session, pan‑European indices also moved higher: the Stoxx 600 added around 0.2–0.3%, with Germany’s DAX up roughly 0.5%, mirroring the firmer tone in London. ^[7]

A morning live blog from The Guardian reported the FTSE 100 up about 0.14% around 09:00 GMT, consistent with a quiet but positive start across European markets ahead of key US inflation data. ^[8]

At the same time, Investing.com’s stock‑market overview notes the FTSE 100 up roughly 0.15% and global indices such as the S&P 500 and Euro Stoxx 50 also nudging higher, highlighting a generally risk‑on backdrop. ^[9]

On a year‑to‑date basis, the FTSE 100’s gains are striking. Analysis from Investing.com UK this morning points out that the index is up about 19.1% in 2025, sitting just 1.9% below the record closing high reached last month. ^[10] That performance has been driven by defence names, miners and large multinationals that benefit from global growth and a weaker pound.

The more domestically focused FTSE 250 is also grinding higher. TechStock²’s pre‑market note says the mid‑cap index finished Thursday up around 0.3%, with industrials, defence and financials leading the move. TechStock²

Macro backdrop: weak UK construction, soft housing, but easier policy ahead

Under the surface, today’s modest rise in UK equities hides some very soft domestic data:

The UK construction PMI for November collapsed to 39.4, the lowest reading since the early pandemic in May 2020, far below the 50 level that signals expansion. Residential activity is at its weakest since the first COVID lockdown, and commercial and civil‑engineering work have seen their sharpest declines in more than five years. TechStock²
The same survey highlights job losses at the fastest pace since August 2020 and sentiment near a three‑year low, as firms react to higher borrowing costs and uncertainty around the government’s Autumn Budget tax rises. TechStock²
The Guardian’s business live coverage today shows Halifax house price data indicating prices were broadly flat in November, and a separate BDO survey pointing to in‑store sales growth of just 1.3%, below inflation — implying real sales volumes are falling. ^[11]

This combination of weak real‑economy data and still‑elevated borrowing costs is central to why markets are now firmly expecting BoE rate cuts.

BoE: December rate‑cut expectations in focus

TechStock²’s opening preview notes that Bank Rate stands at 4.0% after several cuts since August 2024. The BoE has signalled that inflation remains above its 2% target but is clearly falling, and that “further, gradual cuts” are likely if disinflation continues. TechStock²

According to that same piece:

A Reuters poll of economists in mid‑November found nearly 80% expect a 25‑basis‑point cut to 3.75% at the 18 December 2025 MPC meeting, with another cut to 3.5% in Q1 2026. TechStock²
Goldman Sachs Research is pencilling in one cut this month and three more in H1 2026, taking Bank Rate towards 3% by the summer of 2026, alongside GDP growth of around 1.1% and inflation easing towards 2.3% in 2026. TechStock²

For UK equities, a credible rate‑cut cycle is a double‑edged sword: it supports rate‑sensitive sectors such as mid‑caps, REITs and utilities, but it also reflects genuine concerns about the growth outlook.

Global drivers: Fed, PCE inflation and the weaker dollar

Today’s moves in London can’t be separated from the global picture:

MarketPulse (OANDA) notes that European stocks are steady to slightly higher, with basic‑resources names outperforming as copper prices hit record highs. ^[12]
A global markets wrap from Reuters today describes world shares advancing into a second straight week of gains as traders look ahead to US core PCE inflation later in the day — a release widely viewed as key confirmation before an expected Fed rate cut next week. ^[13]
The US dollar index is trading near recent lows against major currencies, while sterling has ticked up, reflecting expectations of easier Fed and BoE policy. ^[14]

This environment — lower yields, softer dollar, and a likely Fed pivot — is supportive for global risk assets, including UK large‑cap equities, many of which earn a majority of their revenues overseas.

Sector and stock movers in London

Ocado jumps on Kroger settlement

One of the day’s standout stories is Ocado:

A compensation deal with US grocer Kroger will see Ocado receive a one‑off $350m cash payment after Kroger chose to close several automated warehouses that use Ocado’s technology. ^[15]
AskTraders reports Ocado shares up more than 8% in early trading, while The Guardian’s live blog notes they briefly surged over 11%, making the company one of the top performers in UK indices today. ^[16]

The payment helps compensate for lost future fee income, and investors appear to be welcoming the cash inflow despite the setback to Ocado’s US rollout.

Unilever’s ice‑cream spin‑off

AskTraders also highlights Unilever confirming that the demerger of its global ice‑cream business, The Magnum Ice Cream Company N.V. (TMICC), will be completed on Saturday 6 December 2025, with the new company due to list in Amsterdam, London and New York from Monday. ^[17]

This is a significant index‑level event: the spin‑off crystallises value in what has historically been a key growth and cash‑flow driver for Unilever, and investors are now assessing how both parent and spin‑off might be valued across multiple exchanges.

Defence, industrials and retailers

Multiple sources emphasise continued strength in defence and industrial names:

TechStock² notes that Rolls‑Royce and BAE Systems have climbed for several sessions, riding a wave of higher defence spending and persistent geopolitical risk. TechStock²
Investing.com’s FTSE 100 analysis adds that Rolls‑Royce shares are up 89% year‑to‑date, making them one of the standout winners of 2025. ^[18]

Elsewhere:

Balfour Beatty is flagged as a rare bright spot in the otherwise troubled construction sector, with its order book expected to grow around 20% in 2025 thanks to more than £3.5bn of power‑generation contracts and a strong UK infrastructure pipeline. TechStock²
Luxury group Burberry has rebounded after a broker upgrade, while Tesco and Sainsbury’s remain sensitive to signs of consumer softness, as surveys show weak retail spending growth. TechStock²+1

Banks, platforms and LSEG

Financials are also in focus:

TechStock² highlights that major UK banks like Barclays have begun to recover as bond yields edge lower and rate‑cut expectations rise, easing some pressure on funding costs and valuations. TechStock²
Investment platform AJ Bell stays under pressure after warning of higher compliance and systems costs tied to ISA reforms, despite strong client growth and share buybacks. TechStock²
London Stock Exchange Group (LSEG) remains on watch as investors digest its expanding cloud and AI partnerships, including tie‑ups with Microsoft and OpenAI, with analysts seeing scope for mid‑single‑digit revenue growth and improving margins over the next two years. TechStock²

FTSE index shake‑up: British Land in, WPP out

Beyond daily price moves, index changes are a major theme this month.

The FTSE UK Index Series December 2025 review confirms that:

British Land Co will join the FTSE 100.
Advertising giant WPP will leave the FTSE 100 and enter the FTSE 250.
Several other companies will move in and out of the FTSE 250. ^[19]

These changes take effect on 22 December 2025, and trading around them has already started, as passive funds and benchmark‑constrained investors rebalance portfolios ahead of the official implementation date. TechStock²

For traders, the review often creates:

Short‑term volume spikes in promoted and demoted stocks
Potential price dislocations relative to fundamentals
Rotations between mega‑caps and mid‑caps, especially if investors see value in under‑owned domestic names

Technical picture: is a Santa rally coming for the FTSE 100?

Short‑term technical analysis is broadly constructive:

MarketPulse’s FTSE 100 technical update notes that the index has held above its 100‑day moving average since late November, a sign of persistent bullish momentum. ^[20]
The same piece highlights support clusters near 9,610–9,686 and nearby resistance around 9,750, 9,800 and 9,850, suggesting the index is edging towards the upper end of its recent trading range and could break higher if global data and central‑bank decisions cooperate. ^[21]

Investing.com’s analysis, published at 08:27 this morning, adds a longer‑term perspective:

The FTSE 100’s year‑to‑date gain of 19.1% leaves it less than 2% below its record closing high. ^[22]
The rally has been driven by defence, mining and other global cyclicals, with investors now “primed for any events which could round off the year in positive fashion.” ^[23]

In terms of forecasts, several commentators are explicitly talking about the possibility of a “Santa rally” into year‑end:

A recent article on Yahoo Finance / The Motley Fool UK argues that seasonal strength, attractive valuations and global rate‑cut hopes could potentially push the FTSE 100 towards the psychologically important 10,000 level and beyond, though it stressed that such scenarios depend on co‑operative inflation and growth data. ^[24]

Taken together, this suggests that upside risks dominate in the near term, but the market is sensitive to disappointment on US PCE, the Fed meeting, or a more cautious tone from the BoE on 18 December.

Analyst views and stock ideas linked to today’s themes

Beyond index‑level calls, a number of recent research and commentary pieces offer clues about where investors are looking in the UK market:

Undervalued UK stocks and mid‑caps: TechStock² notes that UK stocks remain under‑owned and relatively cheap, especially outside the mega‑caps, citing projections for around 12% EPS growth in 2026 and a higher average dividend yield for domestic mid‑caps versus the FTSE 100. TechStock²
Dividend and value ideas: Interactive Investor and other platforms highlight companies such as Future plc — whose 2025 dividend has been ramped up sharply despite a falling share price — as examples of beaten‑up UK names with improving income profiles, though risks remain elevated. ^[25]
Large‑cap stalwarts: Investing.com Academy’s “best UK stocks to buy in December 2025” pieces focus on sectors like healthcare, consumer staples and utilities, arguing that strong balance sheets and resilient cash flows may benefit from lower discount rates as yields fall. ^[26]

While individual recommendations differ by outlet and strategy, common themes include:

Global earners that benefit from a weaker pound and lower global yields.
Domestic cyclicals and mid‑caps poised to gain if rate cuts revive growth.
Defensive dividend payers offering income while investors wait to see how deep the slowdown becomes.

What to watch for the rest of today

Several catalysts could still move UK stocks before the weekend:

US core PCE inflation (September reading, released today) — the Fed’s preferred inflation gauge — is expected to show a modest month‑on‑month increase and ongoing progress towards the 2% target. Surprise strength could dent rate‑cut hopes; a soft reading may reinforce the “goldilocks” narrative powering equities. TechStock²+1
US personal income and spending, factory orders, and University of Michigan consumer sentiment — together, these will refine the picture of US growth and household resilience heading into 2026. TechStock²+1
UK‑specific corporate headlines — especially around banks, index reshuffles (British Land, WPP), and rate‑sensitive sectors such as property and utilities — may drive further stock‑specific volatility. TechStock²+1

If data and central‑bank rhetoric in the coming days line up with current expectations, today’s calm grind higher in the UK stock market could be the prelude to a late‑December rally. But with UK construction, housing and retail signals weakening, the downside risks to growth — and thus to corporate earnings — remain firmly on the radar.