UK Stock Market Today, 3 December 2025: FTSE 100 Slips as Banks Sink, Miners Shine and WPP Faces FTSE 100 Exit

The UK stock market paused for breath on Wednesday, 3 December 2025, as London equities traded just below record territory while investors digested fresh regulatory shocks for banks, a major FTSE index shake‑up and a softer snapshot of the UK services economy.

The FTSE 100 ended marginally lower, closing just under the 9,700 mark and extending a three‑day drift after setting record highs near 10,000 in November. Latest historical data from Investing.com show the blue‑chip index around 9,693 points, down about 0.1% on the day. ^[1]

The more domestically focused FTSE 250 spent most of the session hovering around 21,950–21,990, essentially flat after an early fall of around 0.2% at midday. ^[2]

Behind those small index moves was a much livelier story: banks and consumer names under pressure, miners and energy stocks firmly higher, and investors positioning for a December FTSE reshuffle that is set to expel advertising giant WPP from the blue‑chip club. ^[3]

FTSE 100 and FTSE 250 Today: Quiet Index, Busy Under the Surface

By lunchtime, London was clearly lagging continental peers. Alliance News reported the FTSE 100 down 0.1% at 9,688, with the FTSE 250 off 0.2% at 21,946, even as Paris and Frankfurt edged higher. ^[4]

Reuters described the mood as a battleground between falling financial stocks and rising miners and energy names, with the FTSE 100 and FTSE 250 both down about 0.2% earlier in the session. ^[5]

By late afternoon, however, mid‑caps had largely recovered their losses. Investors Chronicle data showed the FTSE 250 trading near 21,987, up around 0.02% in late trade, underlining how choppy but ultimately directionless the day became for UK equities as a whole. ^[6]

In other words: headline indices barely moved, but stock‑specific stories were anything but dull.

Banks Hit by Motor‑Finance Fallout and Mixed Results

FCA’s car‑finance decision rattles lenders

The biggest drag on the FTSE 100 came from financials, after the UK’s financial regulator, the Financial Conduct Authority (FCA), updated its timetable for dealing with the long‑running car‑finance mis‑selling scandal.

Reuters reported that the FCA will lift its pause on handling motor‑finance complaints on 31 May 2026, two months earlier than initially proposed, as it finalises a compensation scheme for borrowers who were sold loans at inflated interest rates. ^[7]

That raised fears of faster‑than‑expected redress payouts for key high‑street banks:

Lloyds Banking Group slipped about 1%
Close Brothers dropped around 1.5%
Barclays lost roughly 0.6%
HSBC fell about 1.1%, also digesting a surprise governance move (more on that below) ^[8]

Investment banks, brokerages and asset managers also sold off, with Intermediate Capital Group down more than 2%. ^[9]

Paragon and sector‑wide margin worries

On the mid‑cap FTSE 250, Paragon Banking Group was one of the day’s notable losers. The specialist lender reported only a modest rise in full‑year profit despite stronger revenue and loan growth, as credit‑loss charges and provisions for potential motor‑commission redress climbed sharply. ^[10]

At the same time, guidance for net interest margins in 2026 was nudged lower, reinforcing a theme across UK banks this year:
historic earnings look solid, but future profit growth is being squeezed by deposit competition, regulatory risk and slowing loan demand. TS2 Tech

Miners and Energy Stocks Prop Up the Market

While banks wilted, cyclical resource stocks provided the main ballast for the FTSE 100.

Copper, gold and Glencore’s capital‑markets day

An Alliance News midday update had Antofagasta leading the FTSE 100, with gains of around 5% after JPMorganraised its price target and copper prices moved higher. Fresnillo also climbed after being placed on a “positive catalyst watch”, while Glencore advanced more than 4% during its capital markets day, helped by plans to restart the Alumbrera copper‑gold operation in Argentina later this decade. ^[11]

Industrial‑metal miners broadly rose between 1–2%, reflecting optimism about global demand and renewed interest in cyclical sectors after a strong run in AI‑heavy tech stocks elsewhere. ^[12]

Oil & gas: geopolitics keeps energy bid

Energy shares also pushed higher. Reuters noted that energy stocks added around 0.7%, helped by firmer oil prices after talks between US and Russian officials over a potential Ukraine peace deal failed to produce a breakthrough. ^[13]

On the policy side, European headlines that the EU has agreed to a full ban on Russian gas imports by 2027 reinforced the sense that energy security and supply diversification will remain central themes for European utilities and producers well into the next decade. ^[14]

Supermarkets, Healthcare and Transport: Sharp Stock‑Specific Moves

Sainsbury stake sale hits food retailers

Among consumer names, J Sainsbury was one of the most eye‑catching movers. Vox Markets and Alliance News reported that shares slumped around 3.5–4% after Qatar Holding, part of the Qatar Investment Authority, unveiled plans to sell roughly £272m of stock, cutting a long‑standing double‑digit stake in the grocer. ^[15]

The planned selldown also weighed on Tesco and Marks & Spencer, dragging the broader UK supermarkets segment into the red as investors fretted about both ownership changes and an increasingly competitive grocery market. TS2 Tech

Spire Healthcare warns on NHS demand

In the FTSE 250, Spire Healthcare suffered one of the steepest falls on the day. The private‑hospital operator warned that earnings for 2025 will land at the bottom end of its £270–285m guidance range, citing a slowdown in NHS commissioning because of Integrated Care Board budget constraints, even as self‑pay demand continues to grow. ^[16]

Shares in Spire tumbled around 14–16%, making it one of the worst performers across London’s listed mid‑caps and highlighting how unforgiving investors have become toward any hint of softer growth. ^[17]

Trainline downgrade and other mid‑cap movers

Transport stock Trainline also dropped sharply, by around 10%, after a JPMorgan downgrade to “underweight” from “neutral”, reflecting concerns about valuation and the pace of earnings growth after a strong share‑price run. TS2 Tech

On the positive side:

Vehicle‑rental group Zigup rallied about 15% after reporting a “great start” to its financial year and raising guidance, with particularly strong momentum in its Spanish operations. ^[18]
Renewable‑energy and infrastructure funds, including Bluefield Solar, found buyers as investors rotated into income‑producing assets amid still‑elevated bond yields. TS2 Tech

Smiths Group’s £2bn Sale and the Wider M&A/Buyback Theme

One of the day’s key blue‑chip stories was Smiths Group, whose shares rose roughly 2–3% after the engineering group agreed to sell its Smiths Detection baggage‑screening unit to CVC Capital Partners for $2.65bn (about £2bn). ^[19]

Net cash proceeds of roughly £1.85bn are largely earmarked for shareholder returns, continuing a multi‑year portfolio‑simplification strategy and reinforcing a broader 2025 trend in the UK market:

capital return is a major driver of performance, with investors rewarding companies that combine disposals, buybacks and disciplined investment.

Fresh research published today on BP, London Stock Exchange Group (LSEG) and Legal & General echoes that story:

BP is highlighted as delivering a total shareholder yield near double digits when buybacks are included, with up to $20bn of asset sales planned by 2027 to help fund returns and new projects. TS2 Tech
LSEG expects to deploy around £3.5bn of capital in 2025, including ~£2bn in buybacks, while doubling down on AI, data and tokenisation via its Digital Markets Infrastructure platform. TS2 Tech
Legal & General is framed as a high‑yield pension‑risk‑transfer powerhouse, but one where leverage and regulatory scrutiny mean investors demand a rich dividend yield as compensation. TS2 Tech

For UK income investors, this buyback and special‑dividend activity is a core part of the bullish long‑term case for London equities.

FTSE Index Shake‑Up: WPP Out, British Land In

Away from day‑to‑day price action, attention is also fixed on the December quarterly review of the FTSE UK Index Series.

An indicative list published by FTSE Russell on 25 November flagged British Land for promotion to the FTSE 100 and WPP for relegation to the FTSE 250, based on market‑cap rankings. Final changes are due to be confirmed after the close on Wednesday, 3 December 2025, using Tuesday’s closing prices. ^[20]

A detailed Guardian analysis underscores how symbolic WPP’s fall from the top tier has become:

WPP’s market value has collapsed from about £24bn in 2017 to roughly £3.1bn today, after profit warnings and heavy client losses. ^[21]
The group is now seen as a potential takeover or break‑up candidate, and its exit from the FTSE 100 will further reduce the already small number of female chief executives in the index. ^[22]

The reshuffle is likely to trigger index‑tracking flows as passive funds adjust their holdings in the coming days. More broadly, it feeds into the debate about London’s ability to retain major listings even as the FTSE 100 outperforms many global peers in 2025. TS2 Tech

Macro Backdrop: Services Slow, Sterling Climbs, Fed and BoE in Focus

UK services PMI cools but stays in growth territory

Fresh data from S&P Global showed that UK services growth slowed in November, with the services PMI slipping to 51.3 from 52.3 in October, though still above the 50 mark separating expansion from contraction. The composite PMI dropped to 51.2. ^[23]

Survey respondents highlighted:

“Weakening conditions and fragile client confidence”,
Caution ahead of the UK government’s Budget, and
Delayed investment decisions.

However, analysts quoted by Alliance News noted that the final PMI reading was revised higher than the flash estimate, suggesting sentiment improved after the Budget details were released. ^[24]

Sterling strength takes the edge off exporters

At midday, sterling traded around $1.3287, up from $1.3195 at Tuesday’s close, and the euro also strengthened against the dollar. ^[25]

A firmer pound is good news for inflation, but it dulls the earnings translation boost enjoyed by FTSE 100 multinationals, whose profits are largely generated overseas. That currency move was one of several reasons why London failed to fully participate in a modest European equity rally today. TS2 Tech+1

Fed cut expectations and global AI jitters

Globally, markets remain preoccupied with the US Federal Reserve’s December meeting:

Traders are pricing in a 25 bps rate cut next week, with today’s ADP private‑sector jobs report and other labour indicators treated as key guides, especially after a US government shutdown delayed some official data. TS2 Tech
The Bank of England has meanwhile eased capital requirements for major UK banks for the first time since the financial crisis, after they comfortably passed stress tests — a move that helped fuel Tuesday’s bank rally but didn’t prevent today’s pullback. TS2 Tech

Policymakers have also begun to warn about potential bubbles in AI‑linked equities, particularly in the US, creating a backdrop where London’s comparatively modest valuations could be both a cushion and a source of relative strength if a global de‑risking occurs. TS2 Tech

Valuations, Yields and the FTSE 10,000 Debate

UK equities: still cheap versus global peers

Despite record and near‑record index levels, UK equities continue to trade at a substantial discount to global markets:

Research cited today suggests the MSCI UK index trades at roughly a 35% valuation discount to MSCI World, even though about three‑quarters of FTSE 100 earnings come from overseas. TS2 Tech
Asset managers such as BlackRock and Fidelity continue to describe the UK as one of the “cheaper” major stock markets, both on earnings multiples and dividend yields, even after the FTSE 100 has outperformed the S&P 500 in 2025. TS2 Tech

Income investors are also increasingly eyeing mid‑caps. A new Citywire piece by fund manager Laura Foll notes that, in a “highly unusual” turn of events, FTSE 250 companies now offer higher yields than many traditional FTSE 100 dividend stalwarts, reinforcing the case for selective exposure to UK mid‑caps. ^[26]

December “Santa rally” and could FTSE 100 hit 10,000?

Retail‑facing commentary remains surprisingly upbeat:

A fresh analysis highlighted today points out that December has historically been the best month of the year for the FTSE 100 since 1984, both in average return and in the proportion of positive months — the classic “Santa rally” pattern. TS2 Tech
Another Motley Fool UK article published this morning asks bluntly: “Could the FTSE hit 10k before Christmas?”, arguing that fears of a 2025 stock‑market crash have faded and that a fresh record high is plausible if risk sentiment remains supportive. TS2 Tech

Institutional strategists are more cautious, pointing to:

Elevated global valuations in AI‑driven US tech stocks,
Resurgent geopolitical risk, and
Domestic headwinds such as slower services growth, ongoing regulatory overhangs in banking and utilities, and concerns over heavily indebted infrastructure players like Thames Water. ^[27]

The consensus? Further gains are possible, but the easy money has been made, and volatility around central‑bank decisions may spike into year‑end.

What Today’s Market Means for Investors

Putting it all together, 3 December 2025 looks like a classic consolidation day for UK equities:

The FTSE 100 is treading water just below all‑time highs, held back by banks and supermarkets but supported by miners, energy stocks and corporate‑action stories such as Smiths Group. ^[28]
The FTSE 250 is marking time near 22,000, with sharp stock‑specific moves (Spire, Trainline, Zigup, Drax) highlighting both the risks and opportunities in UK mid‑caps. ^[29]
The looming FTSE index reshuffle — likely WPP out, British Land in — underscores how fast market leadership can change, even in a market often pigeonholed as “boring”. ^[30]

For traders and longer‑term investors alike, the key takeaways from today are:

Regulation matters: The FCA’s motor‑finance timetable tweaked a few dates on paper and knocked billions off bank market caps in hours. ^[31]
Valuations still look supportive: Even after a stellar 2025, UK equities remain cheaper than global peers on most metrics, with high cash returns a recurring theme. TS2 Tech
Macro is a two‑edged sword: Softer services PMIs and a stronger pound cap upside in the short term, but also strengthen the case that rate cuts from the Fed — and eventually the BoE — are on the horizon. ^[32]
Santa rally vs AI bubble: The seasonal stats argue for a friendly December, but central‑bank meetings and stretched US tech valuations mean investors should still expect bouts of volatility. TS2 Tech

For now, the UK stock market on 3 December 2025 looks less like a turning point and more like a breather near the summit — a moment where stock‑pickers, rather than index‑trackers, are likely to have the upper hand.