The UK’s FTSE 100 index was set to close at a record high for the first time since March, recouping its tariff-induced slump thanks to an improving economic outlook and easing trade tensions.
The export-heavy index rose as much as 0.4% to 8871.41 level, surpassing its March peak of 8,871.31 points. The UK gauge is catching up to a global equities benchmark and a key European peer in Germany’s DAX index, which have both reclaimed their record highs after April’s rout.
The UK benchmark is still 0.4% below its intraday record of 8,908.82, and sentiment remains fragile as London faces an exodus of companies moving listings to the US and shelving initial public offerings. Defense contractors Babcock International Group Plc and BAE Systems Plc, as well as precious metals miner Fresnillo Plc, are among the biggest gainers in the index this year.
The FTSE 100 rebounded strongly after President Donald Trump paused some of the highest tariffs in a century in April and the UK secured a trade framework with the US. Economic data have also improved, with UK business confidence surging to a nine-month high in May.
“UK stocks are among the cheapest in Europe,” said Georges Debbas, head of European equity derivatives strategy at BNP Paribas Markets 360. “The country is also the most friendly to the US, as it’s the only one to have a firm trade agreement in place. That allows you to have a more constructive view on the market.”
Still, the gauge has trailed other European benchmarks, which benefited from lower interest rates and heavy fiscal stimulus plans led by Germany. The FTSE 100 has advanced 8.5% in 2025, far behind a 21% rally in the German benchmark. Meanwhile, Spain’s IBEX 35 Index is up 23%, while Italy’s FTSE MIB has jumped 18%.
The UK’s stock market has shrunk in recent years amid deal-related delistings, compounded by a lean flow of IPOs and some companies shifting their primary listings to the US in search of more trading liquidity.
