FTSE 100 Holds Firm Despite Slowing UK Growth

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, was trading rose around 0.36% on 30 December 2025. 

Macro Update: In December 2025, the UK economy faces cooling momentum. The Bank of England recently cut interest rates to 3.75% as inflation eased to 3.2%. Despite sluggish 0.1% GDP growth and a rising 5.1% unemployment rate, the stock market remains near record highs. Fiscal pressure persists as the government balances tight budgets against high public debt and tax levels. 

Top Market Movers: Among top gainers on FTSE 100 index, Fresnillo PLC (LSE: FRES) witnessed a rise of 4.95% followed by Anglo American PLC (LSE: AAL) which gained around 2.81%. 

Commodity Update: The U.S. dollar traded steady on Tuesday ahead of the Federal Reserve’s December minutes, expected to highlight policy divergences for 2026. Holiday-thinned liquidity kept currencies calm. Gold rose 0.70% to USD 4,374.05, silver gained 4.43% to USD 73.582, and copper advanced 2.24% to USD 12,484.82. Brent crude eased 0.10% to USD 61.43 despite lingering Russia–Ukraine supply concerns. 

Our Stance: In late 2025, the UK economy faces a "low-growth, high-debt" trap. Despite the Bank of England cutting rates to 3.75% as inflation cools to 3.2%, sluggish 0.1% GDP growth and rising unemployment suggest a fragile recovery hampered by record-high tax burdens. 

FTSE 100: In its latest session, the FTSE 100 Index gained 10.14 points to close at 9,876.67, forming a small bullish candlestick. The broader technical outlook remains constructive. On the daily chart, the index continues to trade above its 50-period Simple Moving Average (SMA), which serves as a key dynamic support and reinforces the prevailing short-term bullish trend. A notable support zone is positioned near 9,800, and maintaining price action above this level will be critical for sustaining the ongoing uptrend. On the upside, a decisive breakout above immediate resistance levels would provide strong bullish confirmation, potentially triggering fresh upward momentum and further improving investor sentiment. From a broader perspective, the index also remains above its 21-period SMA on the weekly chart, underscoring the resilience of its longer-term bullish structure despite recent short-term fluctuations. 

Source - EODHD/Others