London’s financial markets faced a turbulent day on September 25, 2025, as political uncertainty and a wave of international economic data sent ripples through stocks, currencies, and bonds. The FTSE 100 index, a bellwether for UK blue-chip stocks, closed down 36.45 points, or 0.4%, at 9,213.98. The FTSE 250 fared little better, ending the session 102.75 points lower, or 0.5%, at 21,587.77. Meanwhile, the AIM All-Share, often seen as a gauge for smaller growth companies, fell 8.80 points, or 1.1%, to close at 773.62. Similar losses were echoed across other indices, with the Cboe UK 100 down 0.5%, the Cboe UK 250 off 0.8%, and the Cboe Small Companies slipping 0.4%.
Market jitters were stoked by reports of a potential political challenge to Prime Minister Keir Starmer. According to Alliance News, Greater Manchester mayor Andy Burnham revealed he had been approached by a number of Labour MPs about replacing Starmer as Labour leader. Burnham didn’t just hint at leadership ambitions—he also pledged to borrow money to build council houses and launch a mass nationalisation programme, adding, “the UK should not be ‘in hock’ to bond markets.”
Such rhetoric did little to calm investors. Mark Dowding, chief investment officer for fixed income at RBC BlueBay Asset Management, told the Financial Times, “I think this speaks to his own financial naivety. Market confidence would sour very quickly. Yields would rise and the pound would also likely be under pressure.” Kathleen Brooks, research director at XTB, echoed these concerns, warning that Burnham’s agenda could widen the UK budget deficit and push up borrowing costs, which is “why bond yields are rising.”
Indeed, UK government bond yields responded swiftly. The 10-year bond yield firmed to 4.77% from 4.70% the day before, reflecting growing investor worries about increased government borrowing and fiscal discipline. The pound also took a hit, quoted lower at $1.3348 at the close of the London market, compared to $1.3452 the previous day. The euro slid to $1.1676 from $1.1740, while the US dollar gained ground, trading at 149.74 yen, up from 148.75 yen on Wednesday.
Across the Atlantic, however, the mood was somewhat brighter—at least on paper. The US economy posted a robust 3.8% quarter-on-quarter annualised growth rate for the three months to June 2025, according to the Bureau of Economic Analysis. This figure was revised up from a previous estimate of 3.3%, a sign of unexpectedly strong consumer spending. It was a sharp turnaround from the first quarter, when the US economy shrank by 0.5%.
Further bolstering the US outlook, the Labor Department reported that initial claims for state unemployment benefits dropped by 14,000 to a seasonally adjusted 218,000 in the week ending September 20—better than analysts had expected. Durable goods orders also came in strong. As Alliance News noted, analysts at Wells Fargo commented, “Ultimately the updated GDP figures suggest the US economy was undeniably resilient in the first half of the year despite the on-again off-again approach to US trade policy.” They added, “While resilient growth is somewhat hard to square with the rapidly slowing jobs market, it perhaps is best explained by the no hire, no fire dynamic playing out today.”
These positive signals from the US sent the dollar climbing and pushed US bond yields higher. The yield on the US 10-year Treasury rose to 4.20% from 4.14%, while the 30-year Treasury yield widened to 4.78% from 4.76%. European equities also mirrored the cautious sentiment, with the CAC 40 in Paris closing down 0.4% and the DAX 40 in Frankfurt down 0.6%. New York stocks were lower at the London close, with the Dow Jones down 0.3%, the S&P 500 off 0.6%, and the Nasdaq Composite also down 0.6%.
Back in London, individual stocks painted a mixed picture. Halma, a global group focused on life-saving technologies, rose 1.0% after it lifted its full-year revenue expectations. The company now expects to deliver low double-digit percentage organic constant currency revenue growth for the year ending March 31, 2026, up from previous guidance in the upper single-digit range. Analysts at Citi described Halma’s update as “encouraging progress” and said it “points to the upside,” anticipating a 3% to 4% upgrade to consensus revenue expectations.
Other companies were not so fortunate. Phoenix Group shares fell 5.4% as they traded ex-dividend, while ConvaTec dipped 5.6% following news that the US government had launched investigations under Section 232 into imports of medical devices over national security concerns. The US administration is looking into the effects of imports of personal protective equipment, medical consumables, and medical equipment on national security, a move that rattled sector investors.
There were also some standout winners. Petershill Partners, a private equity firm founded by Goldman Sachs in 2007, saw its shares leap 34% after announcing plans to return GBP 3.4 billion (313 pence per share) to shareholders and delist from the London Stock Exchange. The company said its share price and valuation had not “appropriately reflected the quality and underlying value of the company’s assets, its strong financial performance and attractive growth prospects.”
Upper Crust owner SSP advanced 7.0% after reports surfaced that activist hedge fund Irenic Capital Management was seeking takeover interest in the firm. According to the Financial Times, Irenic’s approach at SSP is reminiscent of its campaign at Wagamama owner The Restaurant Group in 2023, which led to a £506 million sale to private equity group Apollo Management.
Commodities markets also saw movement. Brent oil rose to $69.15 a barrel from $68.94, while gold slipped to $3,729.67 an ounce from $3,750.05. Among the FTSE 100’s biggest risers were Rio Tinto, up 168.00p to 4,916.00p; 3i, up 76.00p to 3,947.00p; Entain, up 14.40p to 888.40p; Beazley, up 12.00p to 860.50p; and Smiths Group, up 26.00p to 2,290.00p. The largest fallers included ConvaTec, down 13.20p to 221.20p; Phoenix Group, down 35.50p to 623.00p; AstraZeneca, down 254.00p to 10,956.00p; Barclays, down 8.70p to 376.35p; and DCC, down 104.00p to 4,714.00p.
Looking ahead, the global economic calendar remains busy. On September 26, 2025, investors will be watching for Canadian GDP data, US personal consumption expenditures, and the Michigan consumer sentiment index. In the UK, half-year results are expected from life sciences company Ondine Biomedical and coloured gemstone miner Gemfields Group.
As markets digest the latest swirl of political intrigue and economic signals, one thing’s clear: investor nerves are being tested on both sides of the Atlantic, with every policy hint and data point scrutinized for what it might mean for the months ahead.
