London’s stock market heads into Christmas week with a tailwind — and a warning label.
The FTSE 100 finished Friday at roughly 9,897, within touching distance of its November record around 9,930, as a late-December “Santa rally” narrative gathered pace despite fresh evidence of a UK slowdown. [1]
Now the focus turns to a compressed three-session week (Monday to Wednesday), thin liquidity, and a heavy dose of UK macro revisions — including quarterly GDP updates and business investment — all landing just as passive funds implement December’s FTSE index reshuffle.
Here’s what matters for UK stocks in the week ahead (22–24 December 2025).
Where the UK market stands going into the week
The mood improved materially into the 19 December close:
- FTSE 100: up 2.6% on the week, its strongest since mid-October, as miners and defence stocks led gains. [2]
- Year-to-date: the FTSE 100 is up about 21.1%, outpacing the S&P 500’s roughly 15.1% rise, helped by strength in UK financials and heavyweight global earners. [3]
- FTSE 250: ended Friday little changed after giving up earlier gains — a reminder that domestically tilted UK shares still look more sensitive to local growth signals. [4]
The leadership has also been telling. Reuters flagged precious metals & mining (helped by silver hitting a record) and aerospace & defence among the strongest pockets into the weekend. [5]
That combination — global cyclicals + defensives — is often what you see when investors want to participate in a rally, but still don’t fully trust the macro.
Holiday trading calendar: why three sessions can feel like five
This is a holiday-shortened week for London markets, which tends to mean lower volumes and, paradoxically, sharper price moves when headlines hit.
- Christmas Eve (Wednesday 24 December): London Stock Exchange markets run a half-day, with the closing process starting from 12:30pm London time. [6]
- The LSE is closed on Christmas Day (25 December) and Boxing Day (26 December). [7]
For investors, the practical implication is simple: Monday and Tuesday can carry outsized “week-like” importance, especially if global risk sentiment shifts.
The biggest UK macro catalyst: GDP revisions, business investment and the balance of payments
The most market-relevant UK data cluster of the week arrives on Monday 22 December, when the Office for National Statistics publishes a set of Q3 (July–September 2025) revisions and associated datasets, including:
- GDP quarterly national accounts (and time series)
- UK Economic Accounts
- Business investment (revised results)
- Balance of payments (and time series)
- Quarterly sector accounts
- Consumer trends [8]
Then on Tuesday 23 December, the ONS is scheduled to publish an update connected to the Office for Statistics Regulation’s review into GDP. [9]
Why it matters for UK equities
Even though these are “revisions,” they can move markets because they feed directly into:
- expectations for Bank of England policy in early 2026,
- the path for gilts (and therefore bank margins and equity discount rates),
- and the outlook for domestic cyclicals (retailers, housebuilders, travel & leisure).
In a week with fewer trading hours, one clean surprise print can dominate the tape.
Bank of England backdrop: a cut, a split committee, and “closer call” guidance
Last week’s Bank of England decision remains the macro anchor. In its December minutes, the BoE confirmed it cut Bank Rate to 3.75% after a 5–4 vote, and noted inflation had eased to 3.2% in November. The Committee also reiterated that rates are likely to follow a “gradual downward path,” while warning future decisions will become “a closer call.” [10]
Market takeaway for the week ahead
If Monday’s GDP/investment revisions show softer demand or weaker investment momentum, markets may lean harder into the view that rate cuts continue into 2026 — which can be supportive for:
- rate-sensitive sectors (housebuilders, real estate, consumer discretionary),
- and parts of growth (where the discount rate matters).
But if revisions hint at firmer underlying activity, the “closer call” language becomes more prominent — potentially nudging sterling and gilt yields higher, which can pressure some equities while supporting others (notably certain banks).
UK consumer picture: weak November sales vs the “panic weekend” test
The UK consumer story is the market’s biggest internal contradiction right now: hard data has been soft, but sentiment and seasonality could still rescue the quarter.
What the data just said
Reuters reported UK retail sales volumes fell 0.1% in November, against expectations for a rise, and October’s decline was revised to -0.9%. Supermarket volumes fell for a fourth straight month. [11]
A separate CBI survey painted an even darker near-term picture, with its retail sales balance weakening further in December and expectations for the month ahead sliding to the weakest since early 2021. [12]
What retailers are hoping happens next
Despite that, UK retailers went into the weekend betting on a late surge. The Guardian reported forecasts of roughly £3.4bn in spending over the final pre-Christmas weekend, up more than 12% on the same weekend in 2024, with “Super Saturday” expected to be the busiest day. [13]
Why it matters for investors this week
Markets won’t get “official” December retail data immediately — but investors will listen hard to:
- any company updates,
- sector read-across from consumer-facing stocks,
- and commentary around discounting intensity (margins vs volumes).
In a thin week, even anecdotal read-through can move retail names.
Sector and stock themes to watch in London
1) Miners and precious metals: the rally’s engine room
Reuters highlighted precious metals and mining as a leading sector as silver hit a record. [14]
That strength showed up in big FTSE names late week — including Fresnillo — helping pull the index toward 9,900. [15]
Week-ahead watchpoint: commodity pricing and USD moves (often decisive when UK liquidity is thin).
2) Defence: resilient bid, geopolitics always nearby
Aerospace and defence were also among the leaders on the week. [16]
With year-end positioning underway, defensives that also offer growth narratives can attract “parking” flows.
3) Banks and financials: still a pillar, but data-dependent
The FTSE’s outperformance in 2025 has been linked in part to financial stocks. [17]
Into the week ahead, banks become a lever on two variables:
- what GDP revisions suggest about growth risk,
- what gilts do as rate expectations shift.
Reuters also noted specific bank-related moves tied to regulatory treatment — a reminder that idiosyncratic policy signals still matter. [18]
4) Housebuilders: rate-sensitive, but sentiment fragile
Homebuilders were a drag late week; Reuters pointed to declines in the sector and highlighted a downgrade-driven fall in Barratt Redrow. [19]
They could bounce if GDP revisions are weak enough to revive expectations of faster easing — but the sector is still trading the reality of cautious consumers.
5) Retailers: headlines can outrun data
Between weak November sales and hopes for a late shopping surge, retail may remain headline-driven into Christmas, especially with fewer sessions to smooth volatility. [20]
A structural catalyst on Monday: the FTSE index reshuffle goes live
Monday’s open isn’t only about macro data — it’s also about index mechanics.
FTSE Russell confirmed the December quarterly review changes were implemented after the close on Friday 19 December and take effect at the start of trading on Monday 22 December, including:
- FTSE 100: British Land added; WPP deleted
- FTSE 250: additions include GB Group, Pan African Resources, Princes Group, Shawbrook Group, and WPP; deletions include British Land, European Opportunities Trust, Foresight Solar Fund, PayPoint, and Pinewood Technologies Group [21]
Why investors care
Index changes can create one-off flows as trackers rebalance — especially in a week where natural liquidity is already reduced by holidays.
That doesn’t guarantee a trend, but it can amplify Monday’s moves and distort “signals” from price action early in the session.
Global backdrop: US data, AI nerves and year-end positioning can spill into London
Even when the UK market is locally focused, London doesn’t trade in isolation — and in thin holiday conditions, global sentiment can dominate.
Reuters’ “week ahead” preview for the US pointed to key incoming data including third-quarter GDP, durable goods orders, and consumer confidence during the holiday-shortened week. [22]
Separately, IG’s weekly outlook (published 19 December) highlighted renewed concerns around AI valuations weighing on US sentiment — a theme that can influence global risk appetite and sector rotations. [23]
UK implication: if Wall Street swings on macro prints or tech-led sentiment, the FTSE may react even more sharply than usual because it has fewer sessions and thinner depth to absorb shocks.
Beyond the week: why some strategists are already looking to 2026
While the week ahead is about liquidity and revisions, investor psychology is starting to shift toward 2026 narratives.
A Guardian analysis published Sunday argued there are “reasons to be cheerful” about UK plc next year, citing, among other things, a rise in the flash December PMI to 52.1 (above the 50 growth threshold) and potential tailwinds for consumers from policy changes and rate cuts — while still cautioning that further BoE easing may not be automatic. [24]
Whether or not you buy the optimism, it helps explain the market set-up: near-record index levels alongside uneasy macro debate is exactly the kind of tape that can deliver abrupt shifts on small catalysts — particularly in a holiday week.
Week-ahead checklist for UK stock investors
If you’re tracking the UK market into Christmas, the cleanest way to stay oriented is to watch these five things:
- Monday 22 Dec (AM): ONS GDP and business investment revisions — the main UK macro catalyst. [25]
- Monday 22 Dec (open): FTSE reshuffle effects — British Land/WPP and FTSE 250 changes could drive flow-led volatility. [26]
- Retail pulse after the “panic weekend” — watch sector leaders for trading commentary. [27]
- Commodities and global risk sentiment — miners and defensives have been leading; that can flip fast. [28]
- Christmas Eve half-day mechanics — reduced hours can exaggerate moves and widen spreads. [29]
The bottom line
The FTSE 100 enters the week ahead with strong momentum — up sharply in 2025 and still flirting with record territory — but the combination of major GDP revisions, index rebalancing, and holiday-thinned liquidity means price action may be less reliable and more headline-sensitive than usual.
If 10,000 is the psychological prize, the path there this week is likely to be decided less by “big trends” and more by Monday’s data, Monday’s flows, and global risk appetite between now and Wednesday’s early close. [30]
References
1. www.theguardian.com, 2. www.reuters.com, 3. www.reuters.com, 4. www.reuters.com, 5. www.reuters.com, 6. www.londonstockexchange.com, 7. moneyweek.com, 8. www.ons.gov.uk, 9. www.ons.gov.uk, 10. www.bankofengland.co.uk, 11. www.reuters.com, 12. www.investing.com, 13. www.theguardian.com, 14. www.reuters.com, 15. www.theguardian.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 21. www.lseg.com, 22. www.reuters.com, 23. www.ig.com, 24. www.theguardian.com, 25. www.ons.gov.uk, 26. www.lseg.com, 27. www.theguardian.com, 28. www.reuters.com, 29. www.londonstockexchange.com, 30. www.reuters.com
