In a noteworthy development in financial markets, Britain’s prestigious blue-chip stock index, known as the FTSE 100, has surged past the 9,000-point milestone, achieving a new record high of 9,016.98 points during early trading on Tuesday. This marks a significant rally for the index, which has now garnered an impressive 10% increase throughout the year 2025.

According to analysts, this positive trend can be attributed to a myriad of factors influencing the market landscape this year. One pivotal aspect is the shift among some investors who are looking to diversify their portfolios away from US shares, primarily due to rising concerns regarding former President Donald Trump’s economic policies and his ongoing trade war. The complexity of the international trade environment has led many to consider the UK as a safer haven for their investments.

The implications of the US trade war are particularly beneficial for UK stocks, as Britain is one of the few nations to secure a trade deal that guarantees lower tariffs. AJ Bell investment analyst Dan Coatsworth elaborated on this point, noting that, “With the UK having already reached an agreement on a 10% tariff for trade with the US, including exemptions for specific sectors, the country is now perceived to have a trading advantage.”

Despite facing criticism in recent years, the London stock market has often been likened to a “Jurassic Park” index due to its heavy reliance on established industries and a lack of fast-growing tech firms. However, this perceived drawback has turned into a strength in these turbulent times. Coatsworth described the UK stock market as “the calming cup of tea and biscuit in an uncertain world,” emphasizing its reliability and the consistent performance of its constituent companies.

The volatility stemming from Trump’s trade policies has led to fluctuating conditions in the financial markets throughout 2025, with the FTSE 100 experiencing a notable dip to as low as 7,544 points in early April. Tariff announcements at that time caused considerable disturbances, leading to a temporary sell-off. However, the market demonstrated resilience, rebounding sharply as traders engaged in what has been dubbed the “Taco trade”—the notion that Trump tends to backtrack on aggressive policy strokes when faced with investor unrest.

Among the notable performers on the FTSE 100 this year, the precious metals producer Fresnillo has emerged as the top riser, boasting an impressive 155% increase. This surge is largely attributed to soaring prices for gold, which has reached record highs, alongside silver, which recently peaked at a 14-year high.

Additionally, the prospect of increased military spending has driven up shares in the defense contractor Babcock, which has risen by 120% this year. Other defense companies like BAE Systems and engineering giant Rolls-Royce have also reported significant gains of 66% and 75% respectively, as they continue to benefit from favorable market conditions and resilient business strategies.

Wealth manager at RBC Brewin Dolphin, John Moore, noted that the “strong earnings momentum in the banking and defense sectors” has played a crucial role in driving the FTSE 100 to its record-setting heights. Furthermore, Moore highlighted the UK’s “relative political stability” as a contributing factor. Despite looming prospects of tax increases—which had previously contributed to a sell-off of the pound in early June—the government’s clear direction and mandate for the coming years is seen as a positive differentiator against other European regions, where coalition governments are often in disarray.