Despite some less encouraging economic data elsewhere, the stock market has enjoyed a buoyant 2025 thus far. The FTSE 100 index has risen 11% this year to reach 9,222 – a record high.
For people investment planning in Cheshire and the wider UK, recent stock market movements may have drawn attention.
Against a background of uncertainty following the tariff announcements in the spring, some international investors did withdraw from UK funds. However, there may now be a change in mood amid a realisation that no country is immune to geopolitical pressures. UK shares are indeed trading at comparatively low valuations, especially in smaller to medium sized companies.
Recent sector trends
The UK experienced a series of takeovers in the first part of the year, amounting to circa £74 billion in bids. Many companies were acquired by US private equity groups on the hunt for a bargain.
Defence and security is one area, for example, that has thrived since January, with the FTSE All Share Aerospace and Defence index rising 71.9% over the course of the year, driven by increased military expenditure in the UK, EU and US. Sectors that have recorded growth include the emergence of smaller nuclear reactors to power AI (artificial intelligence) data centres. Gold, too, has enjoyed a strong year, trading on its reputation as a safe haven during instability, and as a target for banks unwilling to hold reserves of dollars.
The FTSE All Share’s constituents are predicted to distribute approximately £91.3 billion in dividends in 2025. The dividend yield is 3.37% compared to 1.21% at the US S&P 500.
