The FTSE 100 closed lower on Monday as investors entered the final full week of 2025 in a cautious mood, with fresh economic data doing little to lift confidence in the UK’s growth outlook for 2026.
Trading was subdued, as expected for the run-up to Christmas. Volumes are thinning and conviction is fading, with many investors easing back rather than placing bold bets ahead of a shortened week.
By the close, the FTSE 100 had fallen 0.3%. The FTSE 250 edged 0.1% higher, while the AIM All-Share gained 0.4%.
Earlier in the day, the Office for National Statistics confirmed that UK economic growth slowed again in the third quarter. Gross domestic product rose just 0.1% in the three months to September, down from 0.2% in the second quarter, which itself was revised lower.
Services and construction both grew by 0.2%, but the production sector shrank by 0.3%. On an annual basis, GDP growth eased to 1.3%. With the Bank of England now expecting growth to stall towards year-end, confidence in a stronger 2026 recovery remains fragile.
Against that backdrop, gold miners stood out with Endeavour Mining rising 1.9% and Fresnillo gaining 2.8%, tracking bullion prices higher. On the FTSE 250, Hochschild Mining added 3.7%. Defensive exposure to precious metals continues to attract capital as investors look for shelter from macro uncertainty.
Elsewhere, Harbour Energy fell 1.3% after confirming its $3.2 billion acquisition of LLOG Exploration. While the company said the deal would boost cash flow and support shareholder returns, the market appeared cautious on timing and execution.
Rank Group slid 4.7% after revealing payment fraud at its Spanish operations totalling around €7.1 million. Meanwhile, Enwell Energy plunged 29% after reporting that its gas processing facilities in Ukraine were hit by Russian drone attacks.
The FTSE 100 continues to hover just below the psychologically important 10,000 mark. The index is trading around 9,850, having flirted with the milestone earlier in the year before gloomy economic data derailed hopes of a year-end rally.
Despite Monday’s dip, the FTSE has had a strong 2025. It is up nearly 20% year to date and has outperformed major US indices, helped by its limited exposure to expensive technology stocks. Tech accounts for just 3.5% of the FTSE 100, compared with roughly a third of the S&P 500.
That has made London attractive for investors looking to diversify away from tech-heavy portfolios. Lower valuations and strong dividend yields have also played a part, particularly as gold miners have surged. Fresnillo is up nearly 400% this year, while Endeavour Mining has climbed 168%.
Before the Budget, expectations were high that the FTSE would break 10,000 before year-end. Those hopes have faded, but not entirely disappeared. December has a reputation for last-minute rallies, even if this year’s macro backdrop makes that harder to achieve.
Looking ahead, commodity prices are likely to remain decisive. Precious metals are providing upside, while weakness in oil has weighed on BP and Shell, both of which have slipped over the past month. With commodities making up around a fifth of the index, their direction could determine where the FTSE heads next.
The outlook for 2026 is mixed. Falling interest rates should support equities, but inflation remains above target and growth is expected to stay weak. Still, the FTSE 100’s global earnings base offers insulation from domestic pressures, and a softer pound could provide further support.
Analysts remain cautiously optimistic longer term, with consensus forecasts pointing to the FTSE reaching around 10,800 by the end of next year, driven by rising profits, dividends and buybacks. Whether the index can muster one final push in the closing days of 2025 remains an open question.