UK Investment & Market Weekly Report Mon 27 Oct – Fri 31 Oct 2025

FTSE 100 Performance

The FTSE 100 extended its strong momentum this week, setting fresh record highs and demonstrating continued resilience across multiple trading sessions. The index closed Friday, 31 October 2025, at approximately 9,720.04 points, representing a weekly gain of approximately +0.77% from the previous week's close of 9,645.62 points.

The index demonstrated consistent performance throughout the week, with daily movements as follows:

Monday, 27 October: 9,653.82 (consolidating previous week's gains)

Tuesday, 28 October: 9,696.74 (building momentum)

Wednesday, 29 October: 9,756.13 (accelerating rally)

Thursday, 30 October: 9,760.06 (hitting fresh record high)

Friday, 31 October: 9,720.04 (modest pullback, -0.41% on the day)

Current Trading Context:

• Year-to-Date Performance: +15.73% (maintaining strong annual trajectory)

• 52-week range: 7,544.83 - 9,760.06 (Thursday's close marked new all-time high)

• Energy and banking stocks provided support throughout the week

• Approximately two-thirds of the index posted gains for the week

• Record high territory: Index set new all-time high on Thursday at 9,760.06

Currency Performance

GBP/USD: The pound showed notable weakness during the week, declining across most sessions

• Friday close: Approximately 1.3137 (down 0.09% on the day)

• Weekly range: 1.3152 - 1.3370 (significant downward movement)

• Weekly performance: Down approximately -2.52% over the month

• Market focus: Budget uncertainty and global dollar strength weighed on sterling

Top Performing & Declining Sectors

Energy & Oil Majors (Strong Performance)

Energy stocks provided significant support as oil prices stabilized and geopolitical factors supported commodity prices. BP and Shell gained 3% and 2% respectively, boosting the index's performance.

Banking & Financial Services (Continued Strength)

Financial stocks maintained their recovery momentum from the previous week, with HSBC leading gains among major UK lenders. However, HSBC dipped on Monday as investors paused after recent rallies.

Industrial & Consumer Stocks (Mixed Performance)

Industrial and consumer-facing names showed mixed results, with selective strength in certain subsectors offset by broader caution ahead of the upcoming Budget.

Precious Metals (Relative Strength)

Gold rebounded 2.4% during the week as safe-haven demand increased amid geopolitical concerns and market volatility.

Investment Market Highlights

Record High Achievement

The week's primary narrative was the FTSE 100 setting a fresh all-time high on Thursday, 30 October, at 9,760.06 points. This represented a 30% gain from the year's lowest point and continued the index's impressive 2025 performance.

Princes Group IPO Completion

Princes Group successfully completed its London Stock Exchange listing on Friday, 31 October, pricing at £4.75 per share (bottom end of the range) and achieving a market valuation of £1.16 billion. The Liverpool-based food company, which produces Branston beans and tinned tuna, raised £400 million in the offering. The lukewarm reception reflected continued caution in London's IPO market, though the government hailed it as a sign of stock market revival.

Budget Uncertainty Intensifies

Chancellor Rachel Reeves' upcoming Budget (26 November) dominated market sentiment, with speculation mounting over potential tax increases totaling tens of billions of pounds. Key concerns included:

• Capital gains tax increases

• Potential mansion tax considerations

• Spending measures and fiscal rule adjustments

• Building larger budget buffers against economic shocks

Venture Capital & Biotech Investment

UK biotech companies raised £187 million in venture capital across Q3 2025, demonstrating continued international investor interest. Global private equity dealmaking showed signs of rebounding, with exits rising to $871 billion globally and Europe recording €90 billion in Q3 alone.

M&A Activity Steady

M&A activity remained consistent with notable deals including:

• Cinven's acquisition of UAX from CVC Funds

• Marex Group's agreement to acquire Geneva-based Valcourt SA

• Chancellor Reeves' pledge to streamline merger processes as part of government red tape reduction initiatives

Market Trends

• Record High Momentum: FTSE 100 setting fresh all-time highs despite global economic uncertainties

• Currency Weakness: Sterling declining amid Budget uncertainty and strong dollar dynamics

• Energy Sector Strength: Oil majors providing significant index support on commodity price stabilization

• IPO Market Caution: Princes Group listing at bottom of range reflecting continued investor wariness

• Budget Positioning: Market participants increasingly defensive ahead of anticipated tax policy changes

• Geopolitical Factors: Safe-haven demand supporting gold and defensive positioning

Economic Context

The week marked a continuation of the FTSE 100's impressive 2025 performance, with the index setting a fresh record high on Thursday before modest profit-taking on Friday. The 0.77% weekly gain, while more modest than the previous week's 3.11% surge, demonstrated underlying market resilience and confidence in UK equities.

However, currency markets told a different story, with sterling declining approximately 2.52% over the month as Budget uncertainty and global dollar strength weighed on the pound. The contrast between equity market strength and currency weakness highlights divergent investor sentiment across asset classes.

The successful completion of Princes Group's £1.16 billion IPO, despite pricing at the bottom of the range, provided a tentative positive signal for London's capital markets. However, the lukewarm reception underscores ongoing challenges in attracting substantial new listings to the London Stock Exchange.

Global private equity and venture capital markets showed signs of recovery, with UK biotech maintaining its appeal to international investors despite broader market caution.

Investment Strategy Outlook

Market participants face a complex environment as the FTSE 100 trades at record highs while significant policy uncertainty looms. The upcoming Budget on 26 November represents a critical inflection point, with potential tax increases of tens of billions of pounds expected to impact investment returns and market sentiment.

Despite currency weakness and Budget concerns, the FTSE 100's strong year-to-date performance (+15.73%) and fresh record highs suggest underlying confidence in UK corporate earnings and valuations. Energy sector strength and banking sector resilience have provided crucial support, offsetting concerns in other areas.

The tentative revival in London's IPO market, exemplified by Princes Group's listing, provides encouraging signs for capital markets activity, though investor caution remains evident in pricing dynamics. Private equity and venture capital markets show signs of recovery, with deal activity and exit volumes improving from previous quarters.

Investors should maintain diversified exposure while remaining alert to Budget policy changes, currency volatility, and sector-specific opportunities. The contrast between equity market strength and sterling weakness suggests selective positioning may be warranted, with focus on internationally-exposed businesses that benefit from currency dynamics and domestic champions with strong pricing power.

The week's performance highlights the importance of balancing optimism about UK equity valuations with prudent risk management ahead of significant policy announcements.