FTSE 100 posts strongest annual gain since 2009 as London market faces IPO test

Britain’s blue-chip index ended 2025 up more than 21 per cent, outperforming U.S and European peers. But business leaders have warned that strong market returns alone will not be enough to stop high-growth companies choosing New York over London for future listings

The UK’s flagship stock index has recorded its strongest annual performance since the global financial crisis, even as business leaders warn that London still risks losing major listings to overseas markets.

The FTSE 100 ended 2025 up 21.5 per cent, marking its best year since 2009. The index closed the year at 9,931, just short of the symbolic 10,000-point threshold.

Data from the London Stock Exchange Group shows the FTSE 100 recorded 41 all-time high closes during the year, reflecting renewed investor interest in UK-listed blue-chip companies after several years of underperformance.

The rally has been driven in part by the index’s heavy weighting towards energy, mining and international businesses, which benefited from record metal prices, a weaker pound at points during the year, and expectations of interest rate cuts by the Bank of England.

Mining stocks were boosted as prices for gold, silver and copper hit record levels amid market volatility, while oil and gas companies also performed strongly. Investors also rotated into UK equities as US markets became more volatile following renewed trade tensions after President Donald Trump’s escalation of tariffs earlier in the year.

The FTSE 100 outperformed several major international peers. France’s CAC 40 gained just over 10 per cent in 2025, while the pan-European Stoxx 600 rose nearly 16 per cent. Germany’s DAX also climbed 21.5 per cent. In the US, the S&P 500 gained 17 per cent, despite a strong rally in large technology stocks linked to artificial intelligence.

Despite the FTSE’s performance, concerns remain about London’s ability to attract new listings, particularly from fast-growing technology companies.

Greg Jackson, chief executive of Octopus Energy, said the London Stock Exchange needed to show more “hustle” to secure potential initial public offerings, including that of Kraken, Octopus’s technology arm.

Jackson said he would “love” for Kraken to list in London but warned that the decision was currently “a coin toss” between the UK and New York. Kraken was formally demerged from the wider Octopus Group this week, positioning it for a potential flotation.

Kraken recently closed a $1bn funding round valuing the business at $8.65bn (£6.4bn). A London listing would be the largest standalone IPO in the city since Haleon’s £30.5bn demerger from GSK in 2021.

“I would need to see more hustle from the London Stock Exchange – they need to be bringing in more capital,” Jackson told the Press Association. He also called on the government to do more to encourage UK pension funds to invest in domestic equities.

Jackson’s comments add to a broader debate about the competitiveness of London’s capital markets, despite signs of recovery in IPO activity. According to Dealogic data, $1.6bn was raised through initial public offerings in London during the fourth quarter alone, raising hopes of a stronger pipeline in 2026.

Chancellor Rachel Reeves has made reviving the UK’s public markets a priority, hosting a series of private meetings with company executives and announcing measures aimed at reducing friction for listings. These include a stamp duty holiday on share trading announced in the November Budget.

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