The UK stock market recorded further strong gains in October 2025, with the FTSE All-Share increasing by 3.7% driven by a
mix of domestic resilience and global tailwinds. The market was helped further by a weaker pound, which bolstered overseas earnings. There were mixed signals from the economic data during the month. According to the Office for National Statistics, the unemployment rate over the three months to September reached 5.0% – a four-year high, while slowing wage growth (4.7% annual growth in regular pay for the period from June to August was the lowest levels for three years) and lower-than-expected annual inflation of 3.8% in September all increased the probability of further and faster interest-rate cuts. Healthcare was the strongest performing sector, with AstraZeneca, GSK and Hikma reporting considerable gains as their share prices rose by 11.5%, 13.1% and 8.3% respectively.
Despite good absolute gains from the UK stock market over the last year, investors continued to remove funds from UK equities with c.£21bn withdrawn over the year to date.
Detractors from performance in October included ICG (formerly Intermediate Capital Group) and Burford Capital. The share price of ICG, a capital provider in private markets, fell 13.3% on concerns about bad debts in its private-credit portfolios. While ICG does have some exposure to First Brands (a US company in financial difficulty), this is minimal and will not directly impact results, in our view. We have known ICG for over 30 years, and it has a truly exceptional long-term record.
The fall in the share price of Burford Capital (-15.2% over October) was mostly caused by a court appeal by Argentina against a major case which Burford has already won. Previous appeals against the same judge who presided in this case have had an over-turn rate of just 4.6%. The odds are therefore heavily stacked in Burford’s favour, yet the market (irrationally in our assessment) seems to take the view that defeat is much more likely than not.
As at 31 October 2025
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Issued by Columbia Threadneedle Management Limited and approved for distribution 18/08/2025.
