UK Investment & Market Weekly Report Mon 3 Nov – Fri 7 Nov 2025

FTSE 100 Performance

The FTSE 100 demonstrated resilience this week, setting a fresh all-time high mid-week before consolidating gains. The index closed Friday, 7 November 2025, at approximately 9,735.75 points, representing a weekly gain of approximately +0.16% from the previous week's close of 9,720.04 points.

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

Monday, 3 November: 9,717.26 (consolidating previous week's record)

Tuesday, 4 November: 9,714.98 (modest pullback)

Wednesday, 5 November: 9,786.80 (strong rally, setting new record high)

Thursday, 6 November: 9,760.06 (slight consolidation)

Friday, 7 November: 9,735.75 (modest pullback, -0.25% on the day)

Current Trading Context:

• Year-to-Date Performance: +15.87% (maintaining strong annual trajectory)

• 52-week range: 7,544.83 - 9,800.35 (Wednesday's close marked new all-time high)

• Energy and banking stocks provided mixed support throughout the week

• Record high territory: Index set new all-time high on Wednesday at 9,786.80

• Bank of England rate hold decision on Thursday influenced sentiment

Currency Performance

GBP/USD: The pound continued its decline, hitting seven-month lows during the week

• Friday close: Approximately 1.3063 (down 0.12% on the day)

• Weekly range: 1.3063 - 1.3137 (continued downward pressure)

• Weekly performance: Down approximately -0.56% for the week

• Market focus: Budget uncertainty, Bank of England rate hold, and strong dollar dynamics weighed heavily on sterling

Top Performing & Declining Sectors

Energy & Oil Majors (Mixed Performance)

Energy stocks showed volatility as oil prices declined to two-week lows. Initial strength from earnings reports gave way to concerns over global demand and geopolitical factors.

Banking & Financial Services (Modest Gains)

Financial stocks posted modest gains of approximately 1.1%, supported by the Bank of England's decision to hold rates at 4.75% following the previous month's cut. However, Budget uncertainty limited upside potential.

Industrial & Consumer Stocks (Cautious Performance)

Industrial and consumer-facing names remained cautious ahead of the Budget, with selective strength offset by broader defensive positioning.

Precious Metals (Exceptional Strength)

Gold surged to unprecedented levels, approaching $4,000 per ounce during the week, driven by intense safe-haven demand amid US government shutdown concerns, geopolitical tensions, and global economic uncertainty. Gold prices reached approximately $4,003 by Friday, marking extraordinary gains.

Investment Market Highlights

Record High Achievement

The week's primary narrative was the FTSE 100 setting a fresh all-time high on Wednesday, 5 November, at 9,786.80 points. This continued the index's impressive 2025 performance, demonstrating resilience despite significant currency weakness and Budget uncertainty.

Bank of England Rate Hold

The Bank of England held interest rates at 4.75% on Thursday, 7 November, following the previous month's cut from 5%. The decision was widely expected but provided temporary support to sterling and financial stocks. The hold signals the BoE's cautious approach amid Budget uncertainty and persistent inflation concerns.

Budget Uncertainty Intensifies

With Chancellor Rachel Reeves' Budget scheduled for later in November, market sentiment remained defensive. Business groups warned against "death by a thousand taxes," with speculation mounting over:

• Potential dividend tax increases

• Capital gains tax adjustments

• Spending measures and fiscal rule modifications

• Deep cuts required to deliver existing tax pledges

New London Listings

The London Stock Exchange welcomed five new listings during the week, offering investors temporary reprieve from the prolonged drought in IPO activity. However, volumes remained modest compared to historical norms, reflecting continued caution in London's capital markets.

Gold's Safe-Haven Surge

Gold prices approached $4,000 per ounce, marking one of the most dramatic safe-haven rallies in recent history. The surge was driven by:

• US government shutdown concerns

• Escalating geopolitical tensions

• Global economic uncertainty

• Central bank reserve accumulation

• Surging ETF inflows

Market Trends

• Record High Momentum: FTSE 100 setting fresh all-time highs despite significant headwinds

• Currency Weakness: Sterling hitting seven-month lows on Budget fears and BoE rate hold

• Safe-Haven Demand: Gold approaching $4,000/oz on exceptional safe-haven buying

• Rate Hold Impact: BoE maintaining 4.75% rate providing modest support to financials

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

• IPO Market Revival: Five new London listings offering tentative positive signal

Economic Context

The week marked a continuation of the FTSE 100's remarkable 2025 performance, with the index setting a fresh record high on Wednesday before modest consolidation. The 0.16% weekly gain, while modest, demonstrated underlying resilience in UK equities despite significant currency weakness and Budget uncertainty.

However, currency markets painted a starkly different picture, with sterling declining to seven-month lows as Budget fears and the Bank of England's rate hold decision weighed heavily. The pound's weakness against the dollar reflects mounting concerns over the UK's fiscal trajectory and potential tax increases that could impact economic growth.

The Bank of England's decision to hold rates at 4.75% following the previous month's cut signals a cautious approach to monetary policy. With inflation concerns persisting and Budget uncertainty looming, the BoE appears content to pause and assess economic conditions before committing to further rate adjustments.

Gold's extraordinary surge toward $4,000 per ounce represents one of the most dramatic safe-haven rallies in recent memory, driven by US government shutdown concerns, geopolitical tensions, and global economic uncertainty. The precious metal's performance underscores heightened risk aversion across global markets.

The tentative revival in London's IPO market, with five new listings during the week, provides encouraging signs for capital markets activity. However, volumes remain well below historical norms, reflecting continued investor caution and London's ongoing struggle to compete with international exchanges.

Investment Strategy Outlook

Market participants face a complex environment as the FTSE 100 trades at record highs while significant policy and economic uncertainties loom. The upcoming Budget represents a critical inflection point, with potential tax increases and spending adjustments expected to significantly impact investment returns and market sentiment.

Despite currency weakness and Budget concerns, the FTSE 100's strong year-to-date performance (+15.87%) and fresh record highs suggest underlying confidence in UK corporate earnings and valuations. The index's resilience in the face of sterling's decline highlights the benefits of international revenue exposure among FTSE 100 constituents.

The Bank of England's rate hold at 4.75% provides a degree of stability for financial markets, though further cuts remain possible depending on inflation dynamics and economic performance. The pause suggests the BoE is adopting a data-dependent approach, carefully balancing inflation concerns against growth risks.

Gold's surge to near-$4,000 levels underscores heightened global risk aversion and suggests investors should maintain diversified portfolios with appropriate safe-haven exposure. The precious metal's exceptional performance reflects deep concerns over geopolitical stability and economic uncertainty.

The tentative revival in London's IPO market offers encouraging signs, though sustained improvement will require resolution of Budget uncertainty and broader improvements in investor sentiment toward UK equities.

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 and ongoing global economic uncertainties.