Meta description: The UK stock market finished modestly higher on 10 December 2025, with the FTSE 100 edging up while the FTSE 250 slipped, as traders positioned for a US Federal Reserve rate cut and a potential Bank of England move next week. Key movers included HSBC, Standard Chartered, FirstGroup, Volution and Ocado, with share buybacks and sector outlooks shaping the broader UK equity story.
Market snapshot – FTSE 100 edges higher, FTSE 250 slips
The UK stock market today (Wednesday, 10 December 2025) delivered a quietly positive session for blue‑chips but a softer one for mid‑caps.
- The FTSE 100 was quoted around 9,660–9,680 points, roughly 0.2–0.4% higher than Tuesday’s close, according to end‑of‑day data from Hargreaves Lansdown and other providers. [1]
- The more domestically focused FTSE 250 underperformed, ending near 21,830–21,865, down around 0.2–0.4% on the day. [2]
That split – large caps up, mid‑caps down – fits a broader pattern seen in 2025: deep, global FTSE 100 names attracting flows, while UK‑centric mid‑caps still face patchy domestic demand and lingering political and economic uncertainty. Earlier this year, UBS noted that while UK shares remain inexpensive versus European peers, earnings momentum has improved most clearly in the FTSE 250, suggesting room for catch‑up if sentiment turns. [3]
Today, though, the story was caution rather than conviction, with attention firmly on central banks.
Global backdrop – Europe soft, Fed “hawkish cut” in focus
Across the continent, European equities slipped as investors took risk off the table ahead of the US Federal Reserve’s final policy decision of 2025:
- The Stoxx 600 fell about 0.2%, with major indices in Germany and Spain also in the red. [4]
- Traders overwhelmingly expect the Fed to deliver a 25‑basis‑point rate cut, but commentary from Chair Jerome Powell is what really matters – markets are braced for what strategists are calling another possible “hawkish cut”: a trim in rates coupled with tough talk on inflation and the 2026 policy path. [5]
In a separate global analysis today, Reuters highlighted that the “global central bank easing cycle is over”, with markets now pricing only three G10 central banks – the Fed, Bank of England and Norges Bank – to cut rates in 2026, while several others may actually raise borrowing costs again. [6]
For UK investors, that backdrop matters. A world where:
- Global rates stop falling,
- Volatility in bonds and currencies reawakens, and
- Inflation proves sticky
is a world where defensives, high‑quality balance sheets and reliable cash flows look more attractive than speculative growth stories.
Wall Street, the Fed and why London feels “stuck in second gear”
UK traders also had one eye on Wall Street futures and the Fed’s statement, with risk appetite constrained as they waited for clarity on:
- How quickly US rates might fall in 2026.
- Whether Powell hints at a pause after today’s cut.
- What that means for the dollar, commodities and global growth.
Analysts at Amundi told Reuters they expect a pause in Fed cuts in Q1 2026, followed by two more cuts in Q2, as US fiscal tightening bites into consumer spending. [7]
For London, that means:
- A softer but still relatively high global rate environment.
- Ongoing competition from US assets offering attractive yields.
- Limited room for UK funding costs to fall drastically, even if the BoE cuts.
No wonder the FTSE 100’s gains today were modest and concentrated in a few winners, rather than broad‑based. [8]
Big movers on the FTSE 100 – banks, media and industrials
Banks: HSBC and Standard Chartered in the spotlight
The standout story in large caps was UK‑listed global banks:
- HSBC and Standard Chartered both jumped around 2%, after BofA Global Research upgraded the pair, boosting sentiment toward the sector. [9]
- The call taps into a theme that UK banks are now:
- Better capitalised than in previous cycles,
- Benefiting from still‑elevated interest margins, and
- Potential beneficiaries of any orderly rate‑cutting path that supports loan growth without crushing margins.
For the FTSE 100, where financials carry significant weight, those gains were a key reason the index outperformed the mid‑cap benchmark. [10]
Information & data: RELX and Pearson
Media and information services also enjoyed a bullish session:
- RELX surged nearly 4%, and Pearson also gained, after J.P. Morgan named the pair among its top European picks, citing strong data, analytics and content franchises with recurring revenues. [11]
These companies exemplify the “quality growth” segment of the UK market – global in reach, highly cash generative, and less exposed to domestic macro swings, which is part of why institutional investors continue to favour them. [12]
Industrials and transport: Volution and FirstGroup
Deal‑driven moves were another theme:
- Volution Group, a ventilation and air‑quality specialist, climbed around 5% after announcing a deal to acquire AC Industries in Australia, bolstering its exposure to the global energy‑efficiency and building‑retrofit theme. [13]
- FirstGroup jumped about 5.5% after being named preferred bidder for a £3bn London Overground rail contract, reinforcing its position at the heart of UK public transport. [14]
Both stories illustrate what’s working in UK equities right now: tangible catalysts – contract wins, acquisitions, and strategic updates – rather than macro storytelling alone.
Mid‑caps and retail – Ocado shines, growth names wobble
The FTSE 250’s negative finish masked notable stock‑specific stories.
Ocado and the grocers
Shares in Ocado surged more than 7% after data from NielsenIQ crowned the online retailer the fastest‑growing UK grocer over the past three months, ahead of the crucial Christmas period. [15]
That update reassured investors that Ocado’s joint venture with Marks & Spencer and its logistics tech platform are translating into real‑world sales momentum in a highly competitive grocery market.
The broader food retail sector saw Tesco and J Sainsbury eke out gains, while Marks & Spencer was broadly flat, reflecting steady but unspectacular pre‑Christmas sentiment. [16]
Growth and alternative income laggards
At the other end of the FTSE 250:
- Kainos Group fell almost 7%, topping the FTSE 250 fallers list on Hargreaves Lansdown’s data, as investors took profits after a strong 2025 rally in software and IT‑services names. [17]
- SDCL Efficiency Income Trust also dropped nearly 7%, extending a tough run for renewable‑energy and infrastructure income funds, which remain sensitive to higher long‑term bond yields and scrutiny of their leverage. [18]
Meanwhile on AIM and small caps, cinema chain Everyman Media slid after warning of weaker‑than‑expected fourth‑quarter box office revenues, underlining the fragile state of discretionary consumer spending. [19]
Sector stories – housing, transport and utilities under the microscope
Beyond day‑to‑day price moves, several pieces of sector‑level analysis published today help frame the UK equity landscape.
Housing & transport: Berkeley and FirstGroup
A detailed note from Kalkine Media highlighted how Berkeley Group and FirstGroup remain influential for sentiment across housing and transport, two pillars of the UK economy: [20]
- Berkeley flagged ongoing planning and regulatory challenges in UK residential development – from complex approval processes to cost inflation – but emphasised its continued focus on urban regeneration and delivery discipline. [21]
- FirstGroup’s new rail contract was presented as part of a broader story around infrastructure and mobility, sectors that tie directly into regional growth, commuting patterns and environmental goals. [22]
Together, the two companies underline how policy, regulation and long‑term government spending can have as much influence on UK equities as near‑term data releases.
Utilities and energy: National Grid and the power transition
Another Kalkine report focused on National Grid, arguing that the company’s ongoing investments in network modernisation, electricity transmission and transition‑related projects help underpin its defensive appeal within the FTSE 100. [23]
With UK 10‑year gilt yields hovering around 4.5%, utilities no longer look obviously “cheap yield plays”, but they do still offer: [24]
- Regulated revenue streams,
- Long‑duration infrastructure assets, and
- A key role in the net‑zero and energy‑security narratives, which are likely to drive capex and policy support for years.
New listing – Generation Essentials Group joins the LSE
On the corporate‑actions front, Generation Essentials Group (TGE) – a media and hospitality group linked to AMTD – completed a secondary listing on the London Stock Exchange’s main market today. [25]
- Its Class A ordinary shares are now dual‑listed on the NYSE and LSE under ticker TGE.
- The company says the move aims to broaden its shareholder base, increase liquidity and align with its European business footprint. [26]
While the stock is small in FTSE terms, the admission adds to a slowly growing pipeline of international companies using London as a secondary listing venue, despite persistent worries about the UK’s ability to attract mega‑IPOs.
Policy outlook – all eyes on the Bank of England
Inflation and the budget effect
The Bank of England (BoE) and UK inflation backdrop remain central to how investors value domestic assets:
- UK CPI fell to 3.6% in October, down from a peak above 11% in late 2022, and the BoE expects inflation to drift toward around 2.5% next year, according to comments reported by The Guardian. [27]
- The Bank also estimates that Chancellor Rachel Reeves’ recent budget could shave up to half a percentage point off inflation by mid‑2026, though some of that may be offset by higher energy‑network charges tied to new infrastructure spending. [28]
That mix – easing but still above‑target inflation plus a fiscal package that marginally cools price pressures – gives the BoE some room to move, but not to slash rates aggressively.
December meeting: “knife‑edge” vote expected
Economists are increasingly framing next week’s Monetary Policy Committee (MPC) decision as a close call:
- Oxford Economics expects a repeat of November’s 5–4 split, but this time with Governor Andrew Bailey casting the decisive vote in favour of a 25‑basis‑point cut. [29]
- The firm argues that softer labour market data and the drop in inflation since the last meeting now “fulfil Bailey’s criteria” for starting the easing cycle – but it stresses that any subsequent cuts are likely to be gradual and limited. [30]
- Their base case is no follow‑up cut in February, and only two further 25‑bp cuts in 2026, implying a terminal Bank Rate somewhere around 3.5% – well above the ultra‑low levels investors were used to in the 2010s. [31]
An Investing.com BoE preview published today echoed that cautious tone, flagging expectations among some investment banks for a single December cut to 3.75%, followed by a pause as the MPC gauges the impact on inflation and wages. [32]
For UK equities, that suggests:
- Relief for rate‑sensitive sectors (housebuilders, real estate, smaller domestically focused lenders).
- Limited help for highly leveraged or structurally challenged names that needed a return to near‑zero borrowing costs.
- A continued premium on quality balance sheets and dependable cash generation.
Buybacks, valuations and the “undervalued UK” story
A major structural theme resurfaced today with a Financial News report on the scale of FTSE 100 share repurchases:
- FTSE 100 companies are on track to complete about £56.6bn of share buybacks in 2025, nearly matching the record ~£58bn set in 2022. [33]
- A record 55 blue‑chip firms have launched programmes this year, often citing tax efficiency and a belief that their shares – and the UK market more broadly – are undervalued. [34]
While buybacks can support earnings per share and signal management confidence, critics quoted in the piece warn that: [35]
- Complex structured execution products carry risks.
- Some boards may be using buybacks to hit short‑term performance targets rather than fund long‑term growth.
- Persistent undervaluation has made buybacks a default use of capital, rather than an opportunistic tool.
From an equity‑market perspective, though, the message is clear:
- Companies and investors agree that UK shares trade at a discount to global peers. [36]
- Boards are increasingly using balance‑sheet strength to shrink share counts and lift returns, especially in sectors like banks, energy, defence and consumer staples. [37]
If the macro backdrop stabilises and outflows from UK equity funds start to reverse, that combination of cheap valuations + aggressive buybacks could act as a powerful tailwind.
UK equity outlook – where analysts see opportunity
A broader UK equity outlook note published today by Kalkine Media highlighted several FTSE 100 sectors as central to the medium‑term opportunity set: [38]
- Defence – Names like BAE Systems and Rolls‑Royce continue to benefit from multi‑year procurement programmes, heightened geopolitical tension and long‑dated service contracts. [39]
- Healthcare and biopharma – AstraZeneca and GSK remain core pillars of the index, powered by R&D pipelines, vaccines and oncology franchises. [40]
- Energy and utilities – BP, Shell and National Grid anchor the UK’s energy transition, balancing shareholder returns with heavy investment in low‑carbon infrastructure. [41]
- Banks and financials – Lloyds, Barclays and global peers continue to adapt to a higher‑for‑longer rate world through digital investment and balance‑sheet reshaping. [42]
- Data and analytics – RELX and other information providers offer recurring revenue and exposure to structural growth in digital services and risk management. [43]
Taken together, these sectors show why many strategists now describe the FTSE 100 as more than just a “value trap” – it’s a global mix of:
- Compounders with durable moats,
- Cash‑rich cyclicals deploying buybacks and dividends, and
- Select growth names with pricing power. [44]
What to watch next
For anyone following the UK stock market this week, the key upcoming catalysts are:
- Tonight’s Federal Reserve decision – Will Powell signal a shallow or steeper cutting path for 2026, and how “hawkish” will today’s cut sound? [45]
- Next week’s Bank of England meeting – Markets now largely price in a December cut, but the vote split, updated forecasts and any guidance on the pace of future easing will be crucial. [46]
- Friday’s UK GDP data for October – A soft print could reinforce expectations for BoE easing, but too weak a number would revive worries about stagnation. [47]
In the meantime, today’s session underlines a familiar 2025 theme:
- The headline indices may look subdued…
- …but below the surface, stock‑specific catalysts – upgrades, contracts, M&A and capital‑allocation decisions – are driving much of the action.
For investors, that means UK equities remain a stock‑picker’s market, in which understanding sector dynamics, policy risk and individual balance sheets matters more than ever.
This article is for information only and does not constitute investment advice. Always do your own research and consider speaking to a regulated financial adviser before making investment decisions.
References
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