The UK stock market is ending 2025 in far better shape than it started. The FTSE 100 is hovering just below record territory around the 9,600–9,700 mark, after a powerful rally driven by banks, energy, miners and defense stocks. TechStock²+ 1
Yet, despite the surge, UK equities still trade at a discount to global peers. RBC Wealth Management estimates the FTSE All‑Share is up about 15% year to date in local currency, but still valued at roughly 12.5x 2026 earnings , below its long‑term median relative to other developed markets. [1]MoneyWeek calculates the FTSE 100’s total return in 2025 at about 22.8% including dividends , its best year since the financial crisis. [2]
In other words: as of 11 December 2025 , UK shares are no longer unloved, but they’re not yet expensive compared with US and European markets.
At the same time, the macro backdrop is turning more supportive:
- Inflation is easing – UK CPI has drifted down towards the mid‑3% range in recent months. [3]
- The Bank of England’s base rate sits around 4% , after earlier cuts, and both RBC and Goldman Sachs expect further reductions through 2026 , with BoE policy potentially falling toward 3% by next summer. [4]
- Goldman Sachs expects the UK economy to grow about 1.1% in 2026 , with inflation heading closer to the BoE’s 2% target. [5]
Against that backdrop, investors scanning the United Kingdom stock market for the best stocks to buy now are really asking two questions:
- Which UK stocks can still outperform after the 2025 rally?
- Which names combine resilient fundamentals with realistic valuations and clear 2026 catalysts?
Below, we highlight nine FTSE shares that stand out today across growth, income and value.
⚠️Important:This article is for information and general news purposes only. It isnotpersonalized investment advice. Always do your own research and consider seeking independent financial advice before investing.
The UK stock market on December 11, 2025: near records, but still discounted
Today’s session has a slightly cautious tone. European shares are modestly lower as tech stocks slide following a weak outlook from US software giant Oracle, and London’s FTSE 100 is edging down around 0.1% in early trade. [6]
Even so, the bigger picture remains bullish:
- The FTSE 100 recently logged multiple record closes and briefly traded within a whisker of the 10,000 level, helped by rate‑cut hopes and strong moves from AstraZeneca and resource stocks. [7]
- MoneyWeek notes that 75% of FTSE 100 constituents have delivered positive returns in 2025 , with banks, insurers, miners and defense shares prominent among the top performers. [8]
- RBC highlights that, even after this rally, UK equities remain cheaper than global peers on forward earnings, and still offer comparatively high dividend yields , especially in financials and utilities. [9]
On the macro side, central banks are steering markets:
- Globally, investors are bidding their time ahead of (and then reacting to) a widely expected 25bp rate cut from the US Federal Reserve , which has kept volatility elevated across equities, currencies and bonds. [10]
- Goldman Sachs believes the UK’s recent budget and the BoE’s likely rate-cutting path should support both gilts and UK stocks , with 10‑year gilt yields projected to drift from around 4.45% to 4% by the end of 2026. [11]
Taken together, the setup for UK shares into 2026 is a mix of:
- Reasonable valuations
- Better‑than‑feared economic prospects
- Structural themes (energy transition, data & analytics, healthcare innovation)
- Still‑healthy dividend and buyback activity
That’s the context for our list of best UK stocks to buy now .
How these “best UK stocks to buy now” were chosen
For this 11 December 2025 snapshot, we looked for FTSE names that combine:
- Robust fundamentals
- Strong or improving revenue, profit and cash flow trends
- Competitive advantages in key markets
- Clear 2026 catalysts
- Product launches, regulatory decisions or major capex programs
- Strategic transformations, demergers or portfolio reshaping
- Reasonable valuations vs growth/risk
- We’re not just hunting for “cheap”; we want risk‑adjusted value
- sector exposure
- Healthcare, energy, financials, consumer staples, infrastructure, data/analytics and real estate
What follows is not an exhaustive list of opportunities on the UK market, but nine FTSE names that currently look particularly interesting .
1. AstraZeneca (AZN) – Global growth at a reasonable price
Theme: High‑quality pharmaceutical growth with multiple late‑stage catalysts.
AstraZeneca remains one of the UK’s flagship growth stocks – and, crucially, it’s still delivering:
- For the first nine months of 2025, total revenue rose about 11% at constant exchange rates to over $43bn , with core EPS up 15% . Oncology revenue grew 16%, and Respiratory & Immunology 13%, underscoring a broad growth base. [12]
- Over the past 12 months, AstraZeneca has generated roughly 40% total return , significantly ahead of the broader FTSE 100. [13]
Two fresh catalysts stand out this month:
- Baxdrostat priority review – The FDA has accepted AstraZeneca’s New Drug Application for baxdrostat under priority review for patients with hard‑to‑control hypertension. If approved, it could become the first aldosterone synthase inhibitor on the market in this indication, giving Astra a differentiated cardiovascular franchise. [14]
- ENHERTU in ovarian cancer – Partner Daiichi Sankyo has begun the phase 3 DESTINY‑Ovarian01 trial of ENHERTU plus bevacizumab as first‑line maintenance therapy in HER2‑expressing advanced ovarian cancer, building on ENHERTU’s growing oncology footprint. [15]
Why it looks attractive now
- The pipeline is firing on multiple fronts (cardiorenal, oncology, rare disease).
- Recent results show double‑digit revenue and EPS growth , with management confident about sustaining momentum into 2026. [16]
- While the shares trade near all‑time highs, their valuation premium versus the broader UK market is justified by growth, and still compares favorably with US “big pharma” peers on a growth‑adjusted basis.
Key risks: Regulatory or clinical setbacks (especially for late‑stage assets), US drug pricing pressure, and currency swings.
2. Shell (SHEL) – Cash machine with optionality on energy transition
Theme: High free cash flow, big buybacks and a strategic upstream move.
Despite volatile oil and gas prices, Shell remains a cash‑generation powerhouse :
- On 30 October 2025 , Shell launched another $3.5bn share buyback , to be completed before its Q4 results, explicitly aiming to shrink its share count. [17]
- The company regularly reports double‑digit free‑cash‑flow (FCF) yields , with a dividend yield near 4% and buybacks equivalent to roughly 6% of market cap per year, according to recent analyst commentary. [18]
There is also a potential upstream kicker:
- Reuters reports Shell is in advanced talks to acquire LLOG Exploration Offshore in the US Gulf of Mexico for more than $3bn , which would expand its high-margin upstream portfolio in a region it knows extremely well. [19]
Analysts remain constructive: JP Morgan Cazenove recently reiterated an Overweight rating , with average targets implying ~20–24% upside over the next year. [20]
Why it looks attractive now
- Shell offers a blend of income and capital returns : a decent dividend plus aggressive buybacks.
- The rumored LLOG deal would deepen Shell’s advantaged Gulf of Mexico position while still leaving room to fund the energy transition (LNG, renewables, low-carbon projects).
- After recent wobbles following rating changes and oil price dips, the stock isn’t priced like a “bubble” despite its strong 2025 run. [21]
Key risks: Commodity price swings, regulatory scrutiny of fossil‑fuel majors, and execution risk on large acquisitions.
3. Rolls‑Royce Holdings (RR.) – High‑beta growth with transformation still under way
Theme: Turnaround champion – but now firmly in the “high‑expectation” camp.
If there’s a poster child for the UK market’s renaissance, it’s Rolls‑Royce :
- MoneyWeek notes that Rolls‑Royce is among 2025’s top FTSE performers , with the share price up around 80–85% year‑to‑date . [22]
- Over the last five years, the stock has delivered a staggering 1,400%+ total return from its crisis lows, according to analysis cited by The Motley Fool. [23]
Under CEO Tufan Erginbilgiç, the company has executed a multi‑year transformation:
- 2025 half-year results highlighted strong profit and cash flow momentum , including a £1bn share buyback for the year and summarized dividends, with total shareholder returns in 2025 expected to reach around £1.9bn . [24]
- Recent updates reaffirm guidance for underlying operating profit of roughly £3.1–3.2bn and free cash flow of about £3.0–3.1bn , despite supply-chain pressures. [25]
However, success comes at a price:
- One recent analyst roundup pegs the average 12‑month price target near £12 , only ~15% above current levels, with the stock on an estimated forward P/E around the high‑30s . [26]
Why it looks attractive now
- If management hits its 2025/26 targets, Rolls is evolving from a rescue story into a structural compounder anchored by civil aerospace, defense and emerging small modular reactor (SMR) projects. [27]
- Operating leverage to global air‑traffic and defense demand remains substantial.
- Insider buying (including a sizeable October director purchase) suggests senior confidence in the longer‑term story. [28]
Key risks:
Valuation is no longer cheap. A global slowdown, aerospace disruption or execution missteps could hit the share price hard given elevated expectations.
4. Lloyds Banking Group (LLOY) – Domestic bank with big buybacks and a blemished 2025
Theme: High‑beta UK recovery play with attractive capital returns – and headline risk.
Banks have led much of the FTSE’s charge this year. According to MoneyWeek’s 2025 scorecard, Lloyds shares are up about 80% year‑to‑date , rivaling some US tech names. [29]
Capital returns have been front and center:
- Lloyds has just completed a £1.7bn share buyback , repurchasing about 2.2bn shares between February and 8 December 2025 , shrinking its share count meaningfully. [30]
At the same time, 2025 hasn’t been flawless:
- In October, Lloyds reported a 36% drop in Q3 profit after booking an £800m charge linked to a UK motor-finance scandal accordingly and trimmed its full-year guidance. [31]
- While earlier in the year it had upgraded underlying profitability expectations on the back of lower loan‑loss assumptions and solid net interest income, analysts are now more cautious on regulatory risk. [32]
Still, some observers see opportunity:
- Interactive Investor recently highlighted Lloyds as one of the “top share trades for 2026” , citing its leverage to any improvement in UK economic sentiment and property markets. [33]
Why it looks attractive now
- Valuation remains modest compared with global banking peers, even after the rally.
- The balance sheet is strong, with solid capital ratios and the scope for continued dividends and buybacks if regulators allow. [34]
- Lloyds offers geared exposure to a potential UK housing and consumer recovery if interest rates fall through 2026.
Key risks: Regulatory and legal risks around motor finance, sensitivity to UK house prices and household finances, and the possibility of further conduct charges.
5. Unilever (ULVR) – Post-Magnum spin-off, margins finally moving higher
Theme: A re‑focused consumer‑staples giant with upgraded margin ambitions.
Unilever has spent years frustrating investors with pedestrian growth and constrained margins. December 2025 may be the moment that story changes:
- On 6 December 2025 , Unilever completed the demerger of its ice-cream business into the separately listed Magnum Ice Cream Company in Amsterdam, retaining about 20% of the new entity with plans to exit fully within five years. [35]
- Following the demerger, Unilever is consolidating its own shares on an 8‑for‑9 basis to reflect the smaller business base. [36]
- The market reaction has been positive: early this week, Unilever’s London‑listed shares jumped nearly 13% as the consolidation took effect. [37]
More important than the optics is the profitability outlook:
- CEO Fernando Fernandez told investors that Unilever’s post‑ice‑cream operating margin should be at least 19.5% , compared with around 18.5% when ice cream was included – a significant uplift. [38]
- The group is budgeting roughly €1.5bn per year for M&A , with up to 95% of that spent aimed at the US , signaling a sharpened focus on higher‑growth categories and geographies. [39]
Why it looks attractive now
- The Magnum spin‑off and share consolidation mark a clear strategic reset , addressing long‑running investor concerns.
- Higher margins, disciplined M&A and sharper category focus could justify a re-rating over 2026 if execution holds.
- As a staple‑heavy portfolio, Unilever also provides defensiveness if economic growth disappoints.
Key risks: Integration and M&A missteps, consumer‑spending pressure, currency moves and any protracted governance noise involving Ben & Jerry’s or the Magnum listing. [40]
6. Diageo (DGE) – Quality franchises in the bargain bin?
Theme: Blue‑chip drinks group in a deep slump, with 2026 potentially a turning point.
If Unilever is the “getting‑its‑act‑together” staple, Diageo is the one still in the doghouse.
- MoneyWeek lists Diageo among 2025’s worst FTSE 100 performers , with the share price down around 25–30% this year after earlier weakness, hurt by tariffs, a tough US market and leadership uncertainty. [41]
- Operating profit for the year to June 2025 fell almost 30% , prompting extended cost-cutting and a CEO change. [42]
- Tariffs have been a major drag: Trump-era duties on UK and European alcohol exports to the US have caused an estimated $150m annual hit to Diageo alone. [43]
Near‑term news hasn’t helped sentiment:
- Unite has announced renewed strike action at Diageo’s Belfast packaging site in December, raising concerns about supply disruptions for Guinness and other brands heading into the key Christmas season. [44]
Yet, under the surface, the risk–reward is shifting:
- Several analyst surveys show consensus price targets 25–30% above today’s level , with multiple houses retaining Buy ratings and pointing to the strength of brands like Johnnie Walker, Guinness and Don Julio. [45]
- Some commentators describe Diageo’s share price, now near multi‑year lows, as a potential “generational bargain” if margins stabilize and tariff headwinds ease. [46]
Why it looks attractive now (for contrarians)
- Diageo remains a global brand powerhouse , spanning whisky, beer, tequila and more.
- If political and tariff pressures gradually normalize and self-help measures bite, earnings could recover from a depressed base.
- The dividend yield is approaching mid‑single digits , providing some income while you wait.
Key risks: Prolonged demand softness, further tariff uncertainty, union action, and the possibility that premium spirits volumes structurally reset lower in key markets.
7. National Grid (NG.) – Defensive income with £60bn+ energy‑transition capex
Theme: Regulated infrastructure at the heart of the UK’s decarbonisation plans.
For investors wanting stability plus inflation‑linked growth, National Grid continues to stand out:
- The shares are up about 19% in 2025 , slightly ahead of the broader index, and offer a dividend yield around 5–6% at current prices. [47]
- National Grid has laid out a five-year investment plan of roughly £60bn , aimed at reinforcing transmission networks and supporting electrification and renewables. [48]
Recent news reinforces its strategic role:
- Regulator Ofgem has approved early investment and updated delivery dates for major “electricity superhighways” projects , including the Eastern Green Link 3 and 4 subsea cables , each designed to carry 2GW of Scottish offshore wind to English demand centres. [49]
- The company has declared a 2025/26 interim dividend of 16.35p per share , with a scrip reference price of 1,130.4p and election deadlines falling this week (11 December for ordinary shareholders). [50]
Why it looks attractive now
- National Grid offers defensive earnings , largely determined by regulated returns, with built-in inflation protection.
- The energy transition is driving structural capex growth , which should translate into a growing regulated asset base – and, over time, higher allowed profits. [51]
- For income‑oriented investors nervous about cyclicals after the 2025 rally, NG. remains a core FTSE 100 income stock .
Key risks: Regulatory changes to allowed returns, political scrutiny of energy bills, and execution risk on large infrastructure projects.
8. RELX (REL) – Quiet compounder riding the data & analytics wave
Theme: High‑margin information, analytics and decision tools with steady growth and buybacks.
While attention has focused on flashier AI names, RELX has quietly continued to compose:
- For the first half of 2025, RELX reported underlying revenue growth of 7% and adjusted operating profit growth of 9% , lifting its margin to 34.8% . [52]
- An October trading update confirmed around 7% underlying revenue growth for the first nine months and reaffirmed full‑year guidance, with CEO Erik Engstrom highlighting momentum across risk, scientific, legal and exhibitions. [53]
Shareholder returns are robust:
- RELX has completed a £1.5bn share buyback for 2025 , repurchasing about 39.5m shares, and has announced a further £250m non-discretionary buyback to run from early January to early February 2026. [54]
Performance-wise:
- Over the past year, RELX has delivered a total return around the mid-teens , slightly trailing the FTSE 100’s stellar 2025 showing but still very solid for a defensive growth name. [55]
Why it looks attractive now
- RELX’s model – recurring revenues from data, analytics and workflow tools – is structurally aligned with the digitization and AI trend , yet less volatile than pure‑play tech. [56]
- The company continues to deliver mid‑single‑digit to high‑single‑digit revenue growth with improving margins and disciplined capital returns.
- Valuation is not cheap, but for investors seeking reliable compounding rather than explosive growth, RELX remains one of the UK market’s higher‑quality franchises.
Key risks: Any slowdown in subscription renewals, regulatory changes impacting data usage, and cyclical swings in its exhibitions business.
9. British Land (BLND) – Real estate recovery with a FTSE 100 comeback
Theme: UK property REIT pivoting to retail parks and modern mixed‑use assets.
After a tough few years for UK property, British Land is quietly back on the front foot:
- FTSE Russell’s December 2025 quarterly review confirms that British Land will re‑enter the FTSE 100 , replacing WPP, with changes effective from 22 December. That upgrade reflects renewed scale and investor interest. [57]
- Over the past year, the shares have gained around 11–12% , and currently sit roughly 10% below their 52‑week high after a recent pullback. The stock sports a P/E around 13–14x and a dividend yield close to 6% . [58]
Operationally, British Land has been reshaping its portfolio:
- Half‑year 2025/26 results show £59m of disposals at about 5% above book value , alongside £52m of acquisitions focused mainly on retail parks with an 8.4% net initial yield . [59]
- Management emphasises that retail parks have delivered around 14% annual total property returns in recent years, and that 72% of the portfolio is now rated EPC A or B, reflecting improved sustainability credentials. [60]
Why it looks attractive now
- As interest‑rate expectations shift lower into 2026, real estate yields become more attractive , and British Land’s low‑teens P/E and high yield look compelling if valuations stabilize.
- Re‑entry into the FTSE 100 could drive index‑tracking inflows and improved liquidity. [61]
- The strategic pivot to retail parks and mixed‑use hubs provides exposure to resilient consumer and logistics demand , rather than purely traditional office risk.
Key risks: UK property values could weaken again if growth disappoints, or if long‑term bond yields stay higher than expected. Leasing and occupancy trends remain important to watch.
How to use this shortlist
A few practical suggestions if you’re building or adjusting a UK stock portfolio today:
- Blend growth and income
- Growth core: AstraZeneca, RELX, Rolls‑Royce (higher risk).
- Income/core defensives: National Grid, Unilever, Diageo (if you can stomach volatility).
- Balance cyclicals with defensives
- Cyclicals/financials: Shell, Lloyds, Rolls‑Royce, British Land.
- Defensives/“quality compounders”: AstraZeneca, Unilever, RELX, National Grid, Diageo.
- Stagger entries
- With the FTSE 100 near record highs and global markets sensitive to Fed and BoE moves, consider phasing purchases rather than going “all in” at once.
- Watch 2026 catalysts
References
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