The UK stock market drew a deep breath rather than a big move on Monday, 8 December 2025, as traders looked past a quiet session in London toward a pivotal week for global central banks.
The FTSE 100 finished essentially unchanged, closing around 9,667 after drifting in a tight intraday range of roughly 9,659–9,676. Over the past 12 months the index is still up about 15–16%, having traded between roughly 7,545 and 9,930in the last year, leaving it only a few percent below November’s recent peak. [1]
Sterling hovered around $1.33 against the US dollar, little changed from recent days, reinforcing the sense of calm before this week’s US Federal Reserve decision and the Bank of England’s December meeting. [2]
Market snapshot: calm surface, powerful currents underneath
Intraday, the FTSE 100 briefly traded modestly higher before slipping back toward the flat line, mirroring the tone in other major markets. A live blog from Yahoo Finance described the index as “hovering around the flatline” on Monday morning as investors looked ahead to the Fed’s final interest-rate call of the year. [3]
Data from Hargreaves Lansdown’s FTSE 100 performance page showed the benchmark at 9,677.41, up about 0.1% at one stage, with a day high just below 9,700 and a low in the mid‑9,650s, underlining how tightly range‑bound trade has become. [4]
From a longer‑term perspective, Investing.com data confirm that the FTSE 100: [5]
- Closed on 8 December 2025 at about 9,666.8, almost unchanged on the day.
- Set a recent high near 9,930 in mid‑November.
- Has gained roughly 15.7% over the last 12 months, with a 52‑week range of 7,544.83–9,930.09.
In other words, today’s sideways session comes with the index still near record territory after a powerful multi‑year rally.
Global backdrop: Fed, China and bonds dominate the narrative
London trading today cannot be separated from the global macro calendar.
In its “Market navigator: week of 8 December 2025”, IG highlights three big international themes currently steering risk appetite: [6]
- The Fed’s December meeting – Markets are heavily pricing in a 25‑basis‑point rate cut, with traders focused less on the move itself and more on the guidance for 2026.
- Mixed but cooling US data – Softer private‑sector job numbers and core PCE inflation in line with expectations have reinforced the sense that US policy rates have peaked, supporting equities and risk assets.
- China’s growth signals – Trade and inflation data this week will offer a fresh read on Chinese demand, especially important for London’s heavyweight miners and energy groups.
A separate Yahoo Finance piece on Chinese exports noted that UK blue chips were little moved even after China reported export growth of nearly 6% in November, reflecting an already‑optimistic backdrop for global trade. The same report showed the FTSE 100 around 9,677, with sterling steady near $1.33. [7]
For UK investors, the global picture boils down to this:
- US policy: markets are betting on gentler Fed policy in 2026, supportive for global equities.
- China: still fragile, but pockets of resilience in trade data help explain the strength in UK‑listed miners.
- Global yields: US 10‑year Treasury yields sit just above 4.1%, well down from 2023 peaks but still high enough to keep valuations in check. [8]
Bank of England: lower rates coming, but with warnings attached
If the Fed sets the tone globally, the Bank of England (BoE) remains the key domestic driver for UK shares.
Rate‑cut expectations
Two major pieces of research published in recent days are shaping how investors think about UK rates and, by extension, UK equities:
- KPMG’s “UK Economic Outlook – December 2025” argues that a more benign inflation outlook and clearer fiscal policy give the BoE room to cut Bank Rate at its December meeting, bringing it to 3.75% by year‑end and then to 3.25% in 2026 as the easing cycle winds down. [9]
- Goldman Sachs Research, in its note on the UK autumn budget, goes further, forecasting a December rate cut followed by three more cuts in the first half of 2026, which would reduce the policy rate to around 3% by the summer of 2026. [10]
Both houses see:
- UK GDP growth around 1–1.4% in 2025–26, relatively modest but not recessionary. [11]
- Inflation gradually returning towards the 2% target by spring 2026. [12]
- UK interest rates staying structurally higher than in the decade before Covid and somewhat above US and eurozone terminal rates. [13]
For equities, that combination – slower but positive growth, inflation back under control, and policy rates drifting lower but not to zero – is generally seen as supportive for banks, insurers, housebuilders and domestic cyclicals, provided the labour market doesn’t deteriorate sharply.
Financial stability and AI valuation risks
The BoE’s December 2025 Financial Stability Report and the associated press conference are also still echoing through the market: [14]
- UK banks passed the 2025 stress tests, with the BoE concluding they could keep lending even in a severe downturn.
- The Bank signalled plans to loosen some post‑crisis capital rules, a move welcomed by bank shareholders. [15]
- At the same time, policymakers warned about the risk of a “sharp correction” in assets linked to AI and highly leveraged borrowers, and highlighted vulnerabilities in the gilt repo market and parts of the rental sector. [16]
For the stock market, that mix – resilient banks but pockets of froth and leverage – tends to favour quality financials and cash‑generative businesses over speculative growth names.
Sector moves and stock stories shaping sentiment
Although the index itself barely moved, today’s UK equity coverage is rich with stock‑specific narratives that help explain where money is flowing inside the FTSE universe.
Miners: Anglo American rides the copper super‑cycle and a mega‑merger
Mining stocks have been among the stronger performers over the past week, supported by firm metal prices and optimism around the global energy transition. Hargreaves Lansdown data show Antofagasta and Fresnillo posting double‑digit one‑month gains, while Anglo American has surged over the last quarter. [17]
A detailed piece from TechStock² notes that Anglo American (LON:AAL) is trading close to a fresh 52‑week high ahead of a crucial 9 December shareholder vote on its transformational merger with Canada’s Teck Resources, which would create a copper‑heavy “Anglo Teck” group headquartered in Vancouver but incorporated and primarily listed in the UK. TechStock²
Key points from that coverage include: TechStock²
- Anglo’s share price has roughly doubled from its 2024 lows, recently trading around 3,000p.
- The company scrapped a controversial executive pay resolution after pushback from major investors, but the merger vote itself remains on track.
- Rating agencies are split: one sees a stronger business profile post‑deal, another flags execution risk and leverage.
For the wider market, Anglo’s story encapsulates two big London themes: the resurgence of “old economy” commodities and the use of large M&A to unlock value in under‑owned UK blue chips.
Banks: Lloyds flirts with the £1 mark
UK‑focused lender Lloyds Banking Group has become one of 2025’s quiet success stories. A fresh article today highlights the stock trading just below the psychologically important £1 level, at about 95–97p, having climbed roughly 75–80% over the last year and more than doubled over two years. TechStock²
According to that analysis: TechStock²+1
- Lloyds has been aggressively buying back its own shares, cancelling nearly 10 million shares in one recent tranche alone.
- The overhang from the motor‑finance mis‑selling scandal has eased after the regulator proposed a smaller‑than‑feared redress package, helping UK bank shares power the FTSE 100 to a record in October.
- Consensus ratings cluster around a “Moderate Buy”, but with relatively modest upside from current levels, suggesting much of the easy value has been realised.
With the BoE now expected to keep rates structurally higher than before Covid but gently lowering them from here, banks like Lloyds look well‑placed to continue returning capital – provided the domestic economy and housing market evolve broadly in line with forecasts. [18]
New listing: Magnum Ice Cream Company joins the London market
One of the day’s headline corporate events is the debut of The Magnum Ice Cream Company N.V. (MICC), spun out of Unilever as the world’s largest pure‑play ice cream group. [19]
An admission announcement confirms that, from 8 December 2025: [20]
- MICC’s shares are dual‑/triple‑listed on Euronext Amsterdam, the London Stock Exchange and the NYSE, under the MICC ticker.
- Trading in London depositary interests began at 8:00 a.m. UK time with 612,259,739 ordinary sharesoutstanding.
- The company generated €7.9bn of revenue in 2024 and positions itself as a focused, growth‑oriented consumer brand platform across Magnum, Ben & Jerry’s, Wall’s and Cornetto.
For London, the listing is symbolically important: it brings a sizeable new consumer‑branded champion to the LSE at a time when policymakers have been trying to reinvigorate the UK’s equity culture and attract more primary listings. [21]
Income themes: high yields, but mind the value traps
Yield‑hungry investors remain spoiled for choice in the UK market. Several pieces of research published today underline that:
- A Motley Fool article highlights the highest‑yielding FTSE 100 constituent, now offering around an 8.6% dividend yield, but questions whether such a payout is sustainable or a potential value trap. [22]
- Another note argues that despite UK indices hitting record highs in 2025, pockets of the market still trade on depressed prices with unusually high yields, creating opportunities for stock‑pickers – but with elevated risk if earnings disappoint. [23]
- Morningstar’s list of top FTSE 100 dividend‑paying stocks points to a deep bench of mature companies offering robust cash returns, from tobacco and energy to telecoms and utilities. [24]
This aligns with Goldman Sachs’ observation that UK mid‑cap and domestic stocks now offer around 1 percentage point more dividend yield than the FTSE 100, yet have underperformed the large‑cap benchmark by double digits since July – a combination it sees as a potential medium‑term opportunity if rate cuts and sentiment improvements draw flows back into UK plc. [25]
Travel and cyclicals: easyJet and TUI under the microscope
On the cyclical side, airlines and leisure remain a focal point:
- A new article on easyJet notes that the company has delivered three consecutive years of profit growth, yet its share price continues to lag, prompting debate over whether the stock is now “a screaming buy” at current levels. [26]
- Hargreaves Lansdown’s preview of the week ahead highlights TUI’s full‑year results as a key event, after the travel group recently reported a 12.6% increase in underlying operating profit and signalled the potential return of dividends in 2026. [27]
Together, these stories underscore one of today’s under‑the‑surface themes: fundamentals in many cyclicals have improved faster than their share prices, leaving room for catch‑up if the economic and rate backdrop evolves favourably.
How we got here: a five‑year doubling and what comes next
Over the medium term, the UK’s equity story has quietly improved. A recent Morningstar analysis notes that the UK stock market has roughly doubled in value over the past five years, helped by: [28]
- The shift from aggressive rate hikes to an emerging rate‑cutting cycle.
- A powerful run in defence, mining and energy stocks.
- A rotation back toward value and income after a long period in which UK equities lagged the US.
At the same time, valuation metrics and external research still tend to characterise London as: [29]
- Cheaper than US peers on traditional measures such as price‑to‑earnings and dividend yield.
- Under‑owned by global investors, particularly in domestically focused mid‑caps.
The OECD, meanwhile, now expects the UK to be the third‑fastest growing G7 economy in 2026, with GDP growth of about 1.2%, behind only the US and Canada – not spectacular, but a step change from the “perma‑gloom” that has weighed on UK asset prices in recent years.
That combination – moderate but improving growth, falling inflation, and still‑modest valuations – is an important part of why strategists at houses like Goldman Sachs see scope for a continued rally in UK stocks, particularly if gilt risk premia normalise and domestic flows into equities pick up.
The week ahead: what UK investors will be watching
Although Monday’s session in London was subdued, the news flow around UK equities is anything but quiet. Key catalysts over the coming days include:
- Central banks
- The US Federal Reserve decision and press conference, where markets will scrutinise the 2026 rate path.
- The Bank of England’s December meeting, widely expected to deliver another rate cut, potentially to 3.75%.
- Corporate results and updates
- Ashtead (US construction exposure, capex cycle bellwether).
- British American Tobacco, with investors watching whether US trends and deleveraging plans support its generous dividend.
- TUI, for clues on consumer confidence and holiday demand going into 2026.
- Big stock‑specific events
- Anglo American / Teck shareholder votes on 9 December, which will determine the fate of one of the year’s biggest mining deals.
- The first days of trading in Magnum Ice Cream Company on the LSE and NYSE, an early test of appetite for newly listed consumer names in London.
- Ongoing buybacks and capital returns from UK banks and insurers, where regulatory signals from the BoE’s Financial Policy Committee will be closely watched.
- Macro data
- UK high‑frequency indicators on labour markets, retail spending and housing, which could confirm (or challenge) the relatively optimistic KPMG and OECD growth forecasts.
Bottom line
Today’s flat close in the FTSE 100 masks a lot of activity under the surface and sets the stage for an important week in UK and global markets:
- The index remains near record levels, up strongly over the last year and five‑year period, but still trading at a discount to many global peers.
- Consensus among major forecasters is that the BoE will continue easing, though rates are likely to settle well above pre‑pandemic levels, supporting banks and income‑generating stocks but keeping a lid on more speculative valuations.
- Stock‑specific stories – from Anglo American’s copper‑driven mega‑merger and Lloyds’ buyback‑fuelled rallyto Magnum’s high‑profile listing – show that London remains a market where disciplined stock‑picking can still uncover both growth and income.
For investors, the message from today’s coverage is clear: the UK stock market in December 2025 is less about dramatic day‑to‑day moves, and more about a slow‑burn shift into a lower‑rate, slightly‑better‑growth regime in which valuations, dividends and balance‑sheet resilience matter more than ever.
This article is for information only and does not constitute investment advice. Capital is at risk and past performance is not a guide to future returns.
References
1. www.investing.com, 2. www.poundsterlinglive.com, 3. uk.finance.yahoo.com, 4. www.hl.co.uk, 5. www.investing.com, 6. www.ig.com, 7. uk.finance.yahoo.com, 8. www.investing.com, 9. kpmg.com, 10. www.goldmansachs.com, 11. kpmg.com, 12. kpmg.com, 13. kpmg.com, 14. www.bankofengland.co.uk, 15. www.theguardian.com, 16. www.theguardian.com, 17. www.hl.co.uk, 18. kpmg.com, 19. www.stocktitan.net, 20. www.stocktitan.net, 21. www.skadden.com, 22. www.fool.co.uk, 23. www.fool.co.uk, 24. global.morningstar.com, 25. www.goldmansachs.com, 26. www.fool.co.uk, 27. www.hl.co.uk, 28. global.morningstar.com, 29. www.goldmansachs.com
