UK equities have experienced one of their best year-to-date (YTD) performances in three decades, despite global uncertainty and general pessimism about the UK economy, analysis from Rathbones has shown.

The wealth management firm noted that the FTSE All-Share Index has posted total returns of 14.5 per cent in the year to 31 August 2025, outperforming all major markets except the German DAX.

This means that 2024/25 was the fifth strongest year for UK equities since 1995, despite concerns around sticky inflation, rising government bond yields, and slow growth.

In comparison, sterling investors in the S&P 500 have seen gains of 3 per cent amid a weak dollar, while the MSCI World Index was up by 5 per cent.

“UK equities have defied expectations this year,” commented Rathbones UK Opportunities Fund fund manager, Alexandra Jackson.

“Despite all the doom and gloom, the All-Share has delivered one of its best year-to-date performances in three decades – a reminder that markets often move ahead of the headlines.

“While investors remain cautious about government debt and inflation, strong company earnings and resilient demand have underpinned returns. This performance shows why the UK should not be overlooked in a diversified portfolio.”

In August, the Bank of England cut rates for the first time since May, while inflation remained stubborn at 3.8 per cent.

Despite the mixed picture, UK GDP growth was stronger than expected, which Rathbones said suggested the UK economy was edging towards a soft landing.

The FTSE All-Share Index’s return of 14.5 per cent this YTD puts it alongside standout years such as 2009 (17.8 per cent) and 2021 (14.7 per cent), and ahead of other strong years including 2013 (13.3 per cent) and 2005 (13.2 per cent).

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