Best UK Stocks to Buy Now (December 2025): 9 Shares to Watch as the FTSE 100 Nears 10,000

The UK stock market heads into the final weeks of 2025 in unusually strong shape. The FTSE 100 has delivered one of its best years since the financial crisis, with total returns of around 23% and multiple record closes in November as banks, miners and defense companies led the charge. ^[1]

Yet even with the index near the 10,000 level, UK equities still trade at a discount to many global peers, and analysts expect falling inflation and interest-rate cuts from the Bank of England (BoE) in 2026 to support corporate profits. ^[2]

Below is a news-driven look at some of the best UK stocks to watch now on the London Stock Exchange as of 9 December 2025 – not as guaranteed winners, but as companies with strong current catalysts, attractive long-term stories, or compelling valuations.

Important:This article is forinformation only, not personal financial advice. Always do your own research and consider speaking to a regulated advisor before investing.

The backdrop: why UK stocks are back in favor

FTSE 100: a strong year, but still not expensive

Despite years of investor apathy towards London, 2025 has been a turning point. The FTSE 100 has outperformed the S&P 500 on a total-return basis this year, driven by traditional sectors such as mining, financials and defence. ^[3]

According to MoneyWeek’s review of the best and worst performing UK stocks of 2025 , stand-out winners include gold and precious metals group Fresnillo (up more than 300%), Airtel Africa and Endeavor Mining, while Rolls‑Royce and Lloyds have also delivered outsized gains. ^[4]

Macro tailwinds: inflation cooling and rate cuts ahead

The Office for Budget Responsibility (OBR) now expects UK CPI inflation to average about 3.5% in 2025 , falling towards 2.5% in 2026 , while the Treasury survey of economists points to inflation around 2.3% by late 2026. ^[5]

Goldman Sachs, meanwhile, expects the BoE to cut rates in December 2025 and three more times in 2026 , potentially bringing Bank Rate down to around 3% by summer 2026 . ^[6]

Lower inflation and gently falling rates typically support:

Banks , as credit losses remain manageable and capital returns stay strong
Utilities and real estate , which benefit from cheaper funding
Quality growth and consumer staples , whose valuations can expand when discount rates fall

With that backdrop, here are nine UK-listed stocks that many investors are watching closely right now.

How these “best UK stocks to buy now” were selected

For this list, the focus is on London-listed large caps and liquid mid caps that have, as of early December 2025:

Fresh news or catalysts (earnings, M&A, regulatory or strategic moves)
Reasonable or improving fundamentals (cash flow, balance sheet, outlook)
Clear themes aligned with the 2026 outlook (defense, energy security, income, defensives, digital infrastructure)

These are examples , not a definitive list. You don’t need to own all of them – and none are risk‑free.

1. AstraZeneca (AZN): defensive growth at the heart of the FTSE 100

Pharmaceutical giant AstraZeneca remains one of the FTSE’s core “quality growth” holdings.

Shares are trading only a few percent below their 52‑week high set in late November, after a strong 2025 driven by oncology and rare disease treatments. ^[7]
Recent regulatory milestones include expanded approvals for cancer drug Imfinzi in early‑stage disease settings, strengthening the medium‑term revenue pipeline. ^[8]
The company is also moving to harmonize its listing structure across London, Stockholm and New York, aimed at making the shares easier to access globally and potentially improving liquidity and index inclusion dynamics. ^[9]

Why investors like it now

Healthcare demand is relatively non-cyclical , which can be valuable if growth slows.
A broad late‑stage pipeline gives AstraZeneca long‑term earnings visibility.
The shares aren’t cheap, but for many institutional investors, AZN remains a core defensive compounder .

Key risks

Patent cliffs, pricing pressure and competition in oncology.
Regulatory setbacks can quickly change feelings.

2. Shell (SHEL): cash returns from a reshaped energy major

After a volatile decade, Shell has quietly become a cash‑return machine .

3. Rolls‑Royce (RR): high‑beta winner from defense and aviation

Rolls‑Royce Holdings has been one of the hottest UK stocks of 2025 . Its share price has surged more than 80% year‑to‑date, and over 1,500% in five years from the post‑pandemic lows, as profitability recovered in civil aerospace and defense. ^[14]

Fresh catalysts include:

A major order for more than 300 Leopard 2 tank engines , underlining strength in defense power systems. ^[15]
A strategic collaboration with engineering groups including Assystem and Atkins to accelerate its nuclear ambitions, particularly small modular reactors. ^[16]
Ongoing momentum in widebody engine flying hours, supported by a strong 2025 air travel recovery and repeat orders highlighted at the Dubai Air Show. ^[17]

Specialist aviation outlet AirInsight recently asked whether RR’s “record‑breaking rally can keep flying”, highlighting both the improved balance sheet and the risk of investor expectations running ahead of fundamentals. ^[18]

Why investors like it now

Leverage to defense spending, global travel and energy transition (via nuclear).
Turnaround story largely de‑risked with improving free cash flow.

Key risks

After such a huge run, even small disappointments could trigger sharp pull‑backs.
Highly cyclical end markets (airlines, defense budgets).

For many, Rolls‑Royce is a high‑beta satellite holding , not a core defensive.

4. Lloyds Banking Group (LLOY): domestic bank riding a profits boom

UK banks have been at the heart of the FTSE 100’s resurgence in 2025. City AM notes that the “Big Four” – HSBC, NatWest, Lloyds and Barclays – have added over £115bn of market value this year thanks to higher net interest margins and hefty shareholder payouts. ^[19]

Lloyds stands out as a geared play on the UK consumer and housing market:

Its share price is up more than 90% over the past 12 months , with a strong 2025 rally. ^[20]
Recent analysis explains that, despite the surge, the valuation still looks modest relative to earnings and capital returns, with ongoing buybacks and a healthy dividend. ^[21]

Why investors like it now

Beneficiary of higher-for-longer rates , at least until cuts bite meaningfully.
Capital returns – dividends plus buybacks – remain substantial.

Key risks

Rate cuts in 2026 could compress margins faster than expected.
A sharper‑than‑expected downturn in UK housing or employment would hit credit quality.

Lloyds is often viewed as a cyclical value stock – attractive when the macro backdrop is benign, but not a set‑and‑forget defensive.

5. Unilever (ULVR): a reshaped consumer giant post‑Magnum spin‑off

Consumer goods heavyweight Unilever is in the middle of a major portfolio reshaping, and December has delivered big news.

On 8 December , Unilever completed the demerger of its ice cream division, now trading as The Magnum Ice Cream Company , listed in Amsterdam (with secondary London and New York listings) at a roughly €7.8–8bn valuation. ^[22]
Following the spin‑off, Unilever will consolidate its shares on an 8‑for‑9 basis, starting trading in its new form on 9 December 2025. ^[23]
The group has also agreed to sell healthy-snack brand Graze to Katjes International, continuing a shift away from legacy food businesses toward higher-margin beauty, personal care and wellbeing lines. ^[24]
Recent equity research notes Unilever could be a “hidden opportunity” after years of mixed performance, with the market under‑appreciating its streamlined portfolio and margin potential. ^[25]

Why investors like it now

Clearer strategic focus on beauty and personal care , where pricing power is strong.
The Magnum spin‑off crystalizes value and may reduce operational complexity.
Still seen by many as a defensive compounder with a solid dividend.

Key risks

Execution risk on portfolio reshaping and marketing spend.
Ongoing governance tensions around activist brands such as Ben & Jerry’s could distract management. ^[26]

6. Diageo (DGE): a beaten‑down consumer champion

Spirits giant Diageo has been on the wrong side of 2025’s winners‑and‑losers list.

Its share price is down around 57% from previous highs , hit by weaker demand, adverse tariffs and changing consumer preferences. ^[27]
Workers at its Belfast packaging site have also voted for an eight-day strike in December over pay, another near-term operational challenge. ^[28]
Recent technical and valuation analysis shows the stock has been falling in recent days, but with declining volume – often interpreted as a sign that selling pressure may be easing. ^[29]

Yet some commentators now describe the shares as approaching a “generational opportunity” if Diageo can stabilize volumes and rebuild margins. ^[30]

Why investors like it now

Portfolio of globally recognized brands (Johnnie Walker, Guinness, Tanqueray, etc.) with long‑term pricing power.
Historically high returns on capital and cash generation.

Key risks

Changing drinking habits, especially among younger consumers.
Currency and emerging-market exposure.
Labor disputes and cost inflation.

For long‑term, patient investors, Diageo is a classic contrarian idea rather than a momentum play.

7. National Grid (NG): income and infrastructure in an electrifying world

National Grid has quietly had an excellent 2025:

Its shares are up around 19–24% over the year , and roughly 80% over five years, as investors reward its regulated asset base and role in the energy transition. ^[31]
The company continues to set out a clear dividend timetable , with the scrip reference price for the 2025/26 interim dividend announced on December 8 and payment scheduled for January 2026. ^[32]

Why investors like it now

Reliable dividends backed by regulated returns.
Structural growth as grids are upgraded for renewables, EV charging and data centers.
Perceived as a bond‑like equity that may benefit as yields fall.

Key risks

Regulation: allowed returns could be squeezed by policymakers.
High capital expenditure needs mean ongoing funding requirements – not ideal if rates stay higher for longer than expected.

8. RELX (REL): data, analytics and buybacks

Information and analytics group RELX is a long‑standing FTSE 100 quality favourite.

Trading updates in 2025 point to strong underlying revenue growth and reaffirmed full‑year guidance, reflecting resilience across scientific publishing, legal, risk and exhibitions. ^[33]
On 7 December, RELX announced a new £250m share buyback program , adding to its long history of returning cash via repurchases while maintaining organic investment. ^[34]

Why investors like it now

Structural tailwinds from data, AI and regulatory complexity .
High margins, strong cash conversion and disciplined capital allocation.

Key risks

Regulatory scrutiny of data usage and privacy.
Valuation: quality comes at a price, and multiple compression is always a risk if growth slows.

For many, RELX is a core long‑term compounder in a portfolio of “best UK stocks” rather than a short‑term trade.

9. British Land (BLND): value and yield in a returning FTSE 100 name

Commercial property group British Land is back in the limelight:

FTSE Russell’s December quarterly review confirmed that British Land will re-enter the FTSE 100 , while advertising group WPP will drop to the FTSE 250. ^[35]
The company is leaning into retail parks , an area that has held up relatively well versus traditional high streets, helping to lift half-year profits. ^[36]
On 8 December its shares fell about 3.3% in a weak market session, leaving them just over 8% below a recent 52‑week high – hardly distressed levels, but still below pre‑pandemic peaks. ^[37]

Why investors like it now

Exposure to UK real estate recovery and falling gilt yields.
FTSE 100 re‑entry can prompt inflows from index funds.
Income potential via dividends from property rents.

Key risks

Property valuations are sensitive to interest rates and consumer demand.
Structural pressures on offices and some retail formats.

British Land is a classic value plus yield play for investors comfortable with property cyclicality.

Putting it together: themes for a UK stock portfolio in 2026

Instead of chasing every hot name, many investors are building diversified baskets around a few key UK themes :

Quality defensives
- Examples: AstraZeneca, Unilever, RELX, National Grid
- Role: Smooth portfolio volatility, provide dividend and long‑term compounding.
Financials and cyclicals
- Example: Lloyds , plus other big UK banks and select insurers.
- Role: Benefit from healthy credit conditions and strong capital returns – but sensitive to macro surprises.
Energy, defense and infrastructure
- Examples: Shell, Rolls‑Royce, National Grid , plus miners and other defense names. ^[38]
- Role: Leverage to geopolitical realities, energy security and government-led infrastructure investment.
Selective recovery and contrarian plays
- Examples: Diageo , some under‑owned consumer and real estate stocks.
- Role: Potential upside if sentiment and earnings gradually normalize.

Practical tips before you buy any UK stock

If you’re deciding which of the “best UK stocks to buy now” actually belong in your portfolio, consider:

Time horizon – Do you plan to invest for years, or trade months?
Risk tolerance – Rolls‑Royce behaves very differently from National Grid.
Diversification – Avoid over‑concentrating in a single sector like banks, miners or energy.
Valuation, not just story – Great companies can be poor investments if you overpay.
Tax wrapper – In the UK, using an ISA or SIPP can make a big difference to after‑tax returns.

For many individuals, blending broad UK equity funds or ETFs with a small basket of carefully researched single stocks is often more sensitive than putting everything into a handful of picks.

Bottom line

As of 9 December 2025 , the UK market is enjoying one of its best years in over a decade, yet still trades at what many see as a discount to global peers. With inflation falling and rate cuts on the horizon, high‑quality defensives, income plays, and selected cyclicals all have a role to play in a well‑diversified portfolio.

Names like AstraZeneca, Shell, Rolls‑Royce, Lloyds, Unilever, Diageo, National Grid, RELX and British Land each offer different combinations of growth, income and recovery potential – but they also carry risks that investors must weigh carefully.