Expectations of interest rate cuts and mining stocks boost the UK FTSE 100 Index, which is expected to have the strongest annual performance in 16 years

The Zhitong Finance App learned on Thursday that in the last few trading days of 2025, the UK FTSE 100 index hovered near record highs and is expected to record the strongest annual increase in 16 years within a shortened trading period.

As of press release, the UK FTSE 100 index was basically flat, closing at a record level the previous day. The FTSE 250 midcap index, which focuses on the domestic market, fell 0.3%.

Since the market is expected to close early at 12:30 noon before the New Year holidays on January 1, trading activity is relatively light.

After years of sluggish performance, the UK's blue-chip FTSE 100 Index is expected to surpass major global markets in 2025. Drivers include expectations for further interest rate cuts by the Bank of England, strong performance in the financial and mining sectors, and the attractiveness of the index as a relatively inexpensive diversification tool during periods of global volatility.

The index rose more than 21% throughout the year, and is expected to rise for the fifth year in a row and record its strongest annual performance since 2009. In contrast, the pan-European STOXX 600 index rose 16.6%, and the US S&P 500 climbed 17.2%.

At the beginning of December, the Bank of England cut interest rates by 25 basis points for the fourth time in a balanced vote, while hinting that the already gradual pace of easing may slow further.

The FTSE 100 Index, which has a large share of resources, received support from miners Fresnillo (Fresnillo), Endeavour Mining (Endeavour Mining), and Antofagasta (Antofagasta). These companies have benefited from soaring gold, silver, and copper prices this year. In contrast, Bunzl (Bunzl) and Diageo (Diageo) both plummeted by about 37%, making the commercial supplies distributor and the world's largest spirits producer one of the worst performing stocks in the index.