Meta description: UK GDP surprised on the downside, rate-cut odds surged, and fresh company catalysts hit the tape. Here are the UK shares investors are watching now.
Updated: Friday, 12 December 2025
UK investors are heading into the final full trading weeks of 2025 with a familiar mix of cross-currents: a soft domestic economy, a likely shift lower in interest rates, and stock-specific catalysts that can overwhelm the macro narrative.
On 12 December 2025, the UK data flow turned meaningfully more dovish. Official figures showed the economy contracted by 0.1% in October and also shrank by 0.1% over the three months to October, against expectations of flat growth—underscoring how fragile momentum was in the run-up to the Chancellor’s late-November budget. [1]
That matters because the market’s “next move” focus is squarely on the Bank of England, where Bank Rate is currently 4% and the next decision is due 18 December 2025. [2] A Reuters poll of economists expects a 25 bp cut to 3.75% on 18 December, with another cut pencilled in for early 2026. [3]
In other words: the playbook for “best stocks to buy now” in the UK market is shifting—from inflation-and-yield anxiety toward selective duration (rate-sensitive) exposure, while still prioritising companies with their own earnings drivers.
Below is a news-driven, diversification-minded shortlist of UK-listed names that stand out right now—based on the major headlines, forecasts, and market moves circulating as of 12.12.2025.
Important: This article is for information and market commentary, not personal investment advice. Shares can fall as well as rise, and the “best” stock depends on your time horizon and risk tolerance.
What changed in the UK market on 12 December 2025
1) UK growth disappointed—and rate-cut odds jumped
The surprise contraction in GDP is one reason investors increased expectations that the BoE will ease policy soon. Reuters reported markets were assigning around a 90% probability to a rate cut next week after the data. [4]
2) Forecasts improved slightly for 2026—but the message is “temporary”
The CBI lifted its 2026 UK growth forecast to 1.3% (from 1.0%) and nudged 2025 to 1.4% (from 1.2%), explicitly linking the upgrade to a temporary boost from government spending. The CBI also warned underlying issues remain and suggested limited scope for aggressive rate cuts, projecting only two further cuts (from 4% to 3.5%). [5]
3) The consumer outlook is mixed: higher spend forecast, but fragile behaviour
A PwC survey expects Britons to spend £24.6bn this Christmas period, up 3.5% on 2024, despite a slow start to festive trading. [6]
But weakness is showing up in specific retailers: Card Factory issued a profit warning, pointing to weaker footfall and subdued consumer sentiment, and guided to lower annual profit than previously expected. [7]
4) Regulators are back in focus for financials
Two headlines sharpened “regulatory risk” for UK finance names:
- The FCA’s proposed motor finance redress scheme may cost more than the regulator’s estimate (sources cited figures closer to £18–20bn vs the FCA’s earlier estimate of about £11bn)—with lenders including Lloyds, Barclays and Close Brothers having increased provisions. [8]
- Nationwide was fined £44m over financial crime control weaknesses (historical period). [9]
5) Stock-specific catalysts landed—especially in healthcare, energy and UK midcaps
Several UK-listed companies had catalysts that investors immediately traded:
- GSK: the FDA expanded use for Blujepa, an oral antibiotic treatment for gonorrhoea. [10]
- Shell: plans for a new drilling campaign offshore Namibia (PEL 39), expected to start April 2026. [11]
- Drax: plans to repurpose coal-era infrastructure into a 100MW data centre by 2027, with longer-term capacity ambitions and a free cash flow/returns framework. [12]
- RS Group: jumped after a J.P. Morgan upgrade, leading FTSE 250 gainers in recent trade. [13]
- abrdn: agreed to acquire the management of about £1.5bn of closed-end fund assets from MFS. [14]
- Capita: updated on trading, cost savings and the handover of legacy contracts. [15]
How falling rates reshape “best stocks to buy now” in the UK
If the BoE cuts, rate-sensitive UK sectors typically get a second look:
- Potential winners: quality housebuilders, select REITs, utilities/infrastructure (cash flows discounted at a lower rate), and consumer names with pricing power.
- More complicated: banks can benefit from better credit demand and risk sentiment, but cuts can also compress net interest margins—so regulatory and book-quality headlines matter more.
This is why, heading into 2026, many UK investors are blending:
- defensive global earners (less tied to UK GDP), with
- tactical UK cyclicals that can re-rate if policy eases.
Best stocks to buy now in the UK: 10 shares to consider (FTSE 100 + FTSE 250)
These aren’t the only investable UK names—there’s no single definitive list—but they are among the most “news-supported” ideas on or around 12 December 2025, with identifiable catalysts and clear watchpoints.
1) GSK (LSE: GSK) — Pharma catalyst + defensive earnings profile
Why it’s in focus now: The FDA expanded the use of Blujepa for gonorrhoea, strengthening GSK’s infectious-disease positioning and adding a fresh near-term narrative driver. [16]
What to watch next
- Commercial uptake and payer coverage for Blujepa.
- Pipeline readouts and updates on how management balances R&D investment with shareholder returns.
Key risks
- Drug development and regulatory risk never disappears; execution matters more than headlines.
2) AstraZeneca (LSE: AZN) — Healthcare momentum in a risk-off macro tape
Why it’s in focus now: In recent London trading, healthcare outperformed with AstraZeneca among the notable gainers—a typical pattern when investors lean defensive into softer growth data. [17]
What to watch next
- Any UK policy shifts affecting medicine pricing and industry economics (a recurring theme in late-2025 UK pharma coverage). [18]
Key risks
- Pipeline/clinical readouts can reprice the stock quickly; FX can also be a factor for global revenue streams.
3) Shell (LSE: SHEL) — Exploration optionality + shareholder returns narrative
Why it’s in focus now: Shell is preparing a new drilling campaign offshore Namibia, with the first well expected from April 2026, according to Reuters. [19]
Macro tailwind/headwind: Oil prices rose on the day amid supply concerns but were still on track for a weekly decline, keeping energy sentiment finely balanced. [20]
What to watch next
- Capex discipline and any further detail on Namibia timelines and expected resource potential.
- Commodity-price sensitivity as investors shift from “inflation fear” to “growth fear”.
Key risks
- Commodity volatility and political/regulatory risk in exploration regions.
4) Drax (LSE: DRX) — An “AI power + infrastructure” angle in a UK-listed name
Why it’s in focus now: Drax plans to convert part of its former coal-era site into a 100MW data centre by 2027, leveraging grid connection and infrastructure, with a longer-term ambition that could exceed 1GW after 2031. Reuters also noted shares rose after forecasts of profits toward the upper end of expectations and Drax outlined a free cash flow and returns framework. [21]
What to watch next
- Partner selection and planning milestones for the data centre.
- The evolving UK policy environment for energy subsidies and “AI power demand”.
Key risks
- Policy/regulatory controversy around biomass economics and sustainability can drive valuation swings quickly.
5) RS Group (LSE: RS1) — Upgraded midcap with sentiment momentum
Why it’s in focus now: RS Group led FTSE 250 gainers after a J.P. Morgan upgrade, a classic near-term catalyst that often pulls incremental flows into a midcap name. [22]
What to watch next
- Whether management commentary continues to support a recovery narrative in industrial demand and inventory normalisation.
- Any follow-through from other brokers (upgrades tend to cluster when the fundamental inflection is real).
Key risks
- If UK/Europe industrial momentum weakens further, “upgrade rallies” can fade fast.
6) abrdn (LSE: ABDN) — Asset management scale move (and fee pressure defence)
Why it’s in focus now: abrdn agreed to acquire the management of about £1.5bn of closed-end fund assets from MFS—an inorganic growth move in an industry where scale and distribution matter. [23]
What to watch next
- Integration detail and how the assets impact fee revenues and margin trajectory.
- Flows: in asset management, net flows can overwhelm everything else.
Key risks
- Structural fee compression across the industry.
- Markets volatility: asset managers are leveraged to risk appetite.
7) Capita (LSE: CPI) — Turnaround exposure with clearly defined execution tests
Why it’s in focus now: Capita said sales growth eased in the second half and flagged it will hand over the last two legacy Life & Pensions contracts, while it continues a cost-saving programme and focuses on longer-term cash generation. [24]
What to watch next
- Delivery against cost savings and free cash flow targets.
- Contract wins vs contract run-off.
Key risks
- Turnarounds are inherently higher risk; small execution misses can have outsized share-price impact.
8) HSBC (LSE: HSBA) — A “financials exposure” option, but pick carefully
Why it can make sense now: UK financials have been sensitive to regulatory signals and capital expectations. Earlier this month, the Bank of England eased bank capital requirements, lifting bank shares in London trade. [25]
But here’s the nuance on 12.12.2025: regulatory uncertainty is rising again via the motor finance redress debate, with potential costs higher than initial estimates and several lenders having increased provisions. [26]
How investors are approaching it
- Many are favouring more diversified, globally exposed banks for broad UK financial exposure—rather than niche lenders most exposed to UK-specific remediation.
Key risks
- Any adverse final outcome on redress frameworks could hit sentiment across the sector, not just the most exposed names.
9) National Grid (LSE: NG.) — Regulated infrastructure with a major UK capex runway
Why it’s relevant now: Ofgem approved £28bn of investment to upgrade the UK’s electricity grid (above earlier proposals), with implications for network operators and the regulated asset base story over the coming years. [27]
Why rate cuts matter: Regulated utilities can re-rate when discount rates fall—if investors trust that returns will be protected.
Key risks
- Political scrutiny if bills rise or if the allowed return framework is challenged.
10) Rio Tinto (LSE: RIO) — A liquid way to play industrial metals strength
Why it’s in focus now: Metals have been volatile, but there are signs of strength: Reuters noted mining shares were supported by higher copper prices recently, and global markets coverage flagged copper dynamics as investors weighed growth and policy. [28]
What to watch next
- China demand signals and policy support (a major driver for copper/iron ore expectations).
- Dividend policy and capex discipline.
Key risks
- Commodity cycles reverse quickly; China data disappointments can hit the whole complex.
Stocks UK investors are treating with extra caution right now
Not every headline is a “buy-the-dip” opportunity. Two UK retail names illustrate why:
- Card Factory (LSE: CARD): issued a profit warning tied to weaker footfall and subdued sentiment, pushing the shares sharply lower. [29]
- WH Smith (LSE: SMWH): delayed its preliminary results publication date due to an accounting issue, which often increases near-term uncertainty until resolved. [30]
These may still become opportunities later—but as of 12 December 2025, the market is demanding clarity.
The three biggest catalysts to watch next week in the UK market
- Bank of England rate decision (18 December 2025) — Bank Rate is 4% and the next decision is scheduled for 18 December. [31]
- The motor finance redress direction of travel — the FCA consultation closes 12 December, with industry pushback on total cost and definitions. [32]
- Sterling volatility and corporate hedging — nearly half of UK firms surveyed by MillTech said pound volatility caused losses in 2025; hedging behaviour is rising, which can influence earnings outcomes for internationally exposed firms. [33]
Bottom line
On 12.12.2025, the UK stock market’s “best stocks to buy now” conversation is being shaped by one dominant macro signal—the economy is soft enough to make a near-term BoE cut more likely—and a cluster of stock-specific catalysts in healthcare, energy, and select midcaps.
A practical way many investors are positioning into year-end is:
- Core defensives with catalysts (GSK, AstraZeneca),
- cash-generative large caps with optionality (Shell),
- select “new narrative” infrastructure/AI-adjacent plays (Drax),
- upgrade-driven midcaps (RS Group),
- rate-sensitive regulated infrastructure (National Grid),
- and a carefully chosen slice of financials and miners—while staying alert to UK regulatory headlines. [34]
References
1. www.reuters.com, 2. www.bankofengland.co.uk, 3. www.reuters.com, 4. www.reuters.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.reuters.com, 15. www.reuters.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.lse.co.uk, 19. www.reuters.com, 20. www.reuters.com, 21. www.reuters.com, 22. www.reuters.com, 23. www.reuters.com, 24. www.reuters.com, 25. www.reuters.com, 26. www.reuters.com, 27. www.reuters.com, 28. www.reuters.com, 29. www.reuters.com, 30. www.reuters.com, 31. www.bankofengland.co.uk, 32. www.reuters.com, 33. www.reuters.com, 34. www.reuters.com
