Home / Business and Economy / UK Stocks Soar: Defense, Gold Shine as AI, Weak Sales Bite
UK Stocks Soar: Defense, Gold Shine as AI, Weak Sales Bite
1 Jan
Summary
- Precious metal miners like Fresnillo led UK stock performance in 2025.
- Defense stocks such as Babcock benefited from increased European spending.
- AI concerns and weak sales impacted companies like WPP and Greggs.
The UK stock market experienced a notable surge in 2025, with the FTSE All-Share Index achieving its most significant gain since 2009. This advance, however, masked a landscape of diverging fortunes. Precious metal miners, notably Fresnillo Plc, saw their values skyrocket as gold and silver prices hit record highs amid rising safe-haven demand and anticipated US interest rate cuts. Companies like Goodwin Plc also benefited from increased defense spending.
In contrast, several prominent companies struggled. WPP Plc became a symbol of the impact of artificial intelligence, losing its FTSE 100 status after two decades. Bakery chain Greggs Plc endured its worst year on record due to sluggish sales and investor concerns. Diageo Plc's performance was hampered by weaker consumer spending in key markets, despite the popularity of its Guinness stout.
Despite a stalling domestic economy, some companies demonstrated resilience. Next Plc, a bellwether for the UK High Street, repeatedly raised its profit outlook. Investors are optimistic that potential Bank of England rate cuts in 2026 could further boost smaller and mid-cap stocks, attracting overseas investment due to the market's perceived value.
