Foreign investors return to London as FTSE 100 outperforms Europe
After years of lagging behind, UK stocks are regaining favor among global investors, driven by a strong rally in the FTSE 100, regulatory reforms, and optimism over a UK-U.S. trade deal.
The FTSE 100 has climbed nearly 10% this year, hitting record highs and outperforming the STOXX 600’s 7.5% gain. In dollar terms, the index is up almost 18%, marking its best year since 2009 and surpassing the S&P 500’s 6% rise, News.Az reports, citing Reuters.
Sterling’s 7% surge against the dollar, which typically pressures UK exporters, hasn’t deterred interest. Large asset allocators, including non-UK pension funds and endowments, are returning to Britain, according to St. James’s Place CIO Justin Onuekwusi.
Analysts point to the FTSE’s mix of defensive giants like AstraZeneca and Tesco, alongside resource firms such as BP and Anglo American, as a key draw for investors seeking stability and exposure to commodities.
Regulatory plans to boost capital markets and Chancellor Rachel Reeves’ push for a more positive narrative on UK equities add to the momentum. Meanwhile, Britain enjoys reduced trade uncertainty with a U.S. deal in place — a sharp contrast to the EU, which faces looming tariff risks.
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