London close: Stocks flat as weak gold miners offset banking strength
By Michele Maatouk
Date: Tuesday 02 Dec 2025
(Sharecast News) - London stocks ended flat on Tuesday, with strength in the banking sector offset by a weak showing from gold miners, as investors awaited fresh catalysts.
The FTSE 100 closed steady at 9,701.80.
Investors were mulling the latest uninspiring global economic outlook from the Paris-based Organization for Economic Co-operation and Development, which said economic growth in the UK was set to slow in the next year, weighed down by the impact of tax rises on consumption.
The UK economy will grow by 1.2% in 2026, down from its forecast 1.4% this year, the OECD said. It is then expected to tick up again, to 1.3% in 2027.
The OECD attributed the likely slower rate of growth in 2026 to the "continued effect of budgetary tightening on consumption and to the drag from global uncertainty".
The 2026 forecast is comfortably below that for the G20 as a whole, of 2.9%.
However, the UK is predicted to grow at a quicker pace than a number of European economies, including France and Germany. The OECD expects both to growth by 1%. Outside of Europe, the OECD is predicting the US will grow by 1.7%, and China by 4.4% next year.
In the UK, inflation is forecast to peak at 2.5% next year before falling to 2.1% in 2027.
The consumer price index currently stands at 3.6%, comfortably ahead of the Bank of England's long-term target of 2%.
The OECD said: "The monetary policy stance is expected to become neutral as the easing cycle ends.
"At the same time, fiscal policy will remain restrictive given high government borrowing costs, as well as large, albeit declining, budget deficits and rising public debt.
"Continuing to ensure that consolidation is carefully timed, given substantial risks to growth and upside risks to inflation, and well calibrated, with a combination of revenue-raising measures and spending cuts, is essential."
Investors were also digesting the latest data from Nationwide, which showed house prices continued to rise in November, although the pace of growth eased slightly.
House prices grew by 1.8% year-on-year, down on October's 2.4% spike but ahead of expectations for a 1.4% uplift.
Month-on-month, seasonally adjusted growth was 0.3%, also ahead of consensus, for 0%.
The average house price now stands at £272,998.
Robert Gardner, Nationwide's chief economist, said: "Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid, and house prices are close to all-time highs."
In last month's Budget, chancellor Rachel Reeves announced a council tax surcharge for properties valued at more than £2m.
However, Gardner said the so-called mansion tax was unlikely to have a "significant" impact on the housing market.
"The surcharge, which is not being introduced until April 2028, will apply to less than 1% of properties in England, and around 3% in London," he noted.
The latest shop price monitor from the British Retail Consortium and NIQ was also in focus. It showed that shop prices fell in November as retailers started to launch their Black Friday deals and promotions.
In equity markets, Lloyds, Barclays, NatWest and Standard Chartered were among the top performers after the Bank of England said all seven of the biggest lenders passed its stress tests.
In its half-year Financial Stability Report, the Bank flagged increased risks to the UK's financial system, including sky-high valuations of tech companies, while also trimming the amount of capital banks need to hold in reserve.
However, despite the heighted risk climate, the BoE opted to cut capital requirements for the UK's biggest banks after they passed its latest stress tests.
It found that the sector was well capitalised, and that UK household and corporate aggregate indebtedness remained low. As a result, the BoE lowered the appropriate benchmark for the level of Tier 1 capital requirements to 13% from 14%, the equivalent to a CET1 ratio of around 11%. Analysts had been largely expecting the reduction.
Russ Mould, investment director at AJ Bell, said: "The UK banking sector has passed the Bank of England's stress test with flying colours.
"The industry and authorities learned some valuable lessons from the global financial crisis in 2008 and banks have subsequently become stronger entities. No-one wanted a repeat of what happened 17 years ago when various banks had to be bailed out. That crisis led to UK banks being pushed to have more capital to withstand any shocks.
"The latest stress test means that major UK banks would be able to cope with a severe decline in the economy and provide ongoing support to consumers and businesses.
"Importantly, the stress test results have given the Bank of England confidence to cut its estimate of how much capital banks need to hold. The government will no doubt welcome this news, given its desire to encourage more lending to drive economic growth."
Victrex shot to the top of the FTSE 250 as the polymers group said it has launched a "profit improvement plan" targeting £10m of savings, after underlying earnings dropped 21% over the 12 months to 30 September.
On the downside, precious metals miner Fresnillo and gold miner Endeavour both lost their shine as silver and gold prices fell back.
Housebuilders Berkeley Group and Barratt Redrow lost ground after downgrades to 'underperform' from 'outperform' and to 'sector perform' from 'outperform', respectively, by RBC Capital Markets.
Market Movers
FTSE 100 (UKX) 9,701.80 -0.01%
FTSE 250 (MCX) 21,982.00 -0.18%
techMARK (TASX) 5,533.07 0.05%
FTSE 100 - Risers
Airtel Africa (AAF) 318.60p 2.12%
Lloyds Banking Group (LLOY) 97.50p 1.95%
Land Securities Group (LAND) 612.00p 1.92%
Vodafone Group (VOD) 93.94p 1.71%
Metlen Energy & Metals (MTLN) 44.30p 1.61%
Barclays (BARC) 436.40p 1.58%
Legal & General Group (LGEN) 248.00p 1.47%
Flutter Entertainment (DI) (FLTR) 15,960.00p 1.43%
NATWEST GROUP (NWG) 640.20p 1.33%
Halma (HLMA) 3,592.00p 1.19%
FTSE 100 - Fallers
Fresnillo (FRES) 2,728.00p -3.26%
Berkeley Group Holdings (The) (BKG) 3,590.00p -3.23%
WPP (WPP) 289.20p -3.18%
Smurfit Westrock (DI) (SWR) 2,617.00p -2.71%
Whitbread (WTB) 2,403.00p -2.52%
Rightmove (RMV) 532.00p -2.28%
Auto Trader Group (AUTO) 620.80p -2.14%
Marks & Spencer Group (MKS) 340.10p -2.13%
Antofagasta (ANTO) 2,771.00p -1.74%
Barratt Redrow (BTRW) 382.10p -1.72%
FTSE 250 - Risers
Victrex plc (VCT) 672.00p 7.69%
Foresight Environmental Infrastructure Limited (FGEN) 69.80p 3.10%
Playtech (PTEC) 285.50p 2.15%
Lion Finance Group (BGEO) 9,155.00p 2.12%
OSB Group (OSB) 580.50p 1.84%
Abrdn (ABDN) 205.60p 1.78%
IG Group Holdings (IGG) 1,143.00p 1.78%
SDCL Efficiency Income Trust (SEIT) 62.50p 1.63%
IntegraFin Holding (IHP) 345.00p 1.47%
Empiric Student Property (ESP) 74.60p 1.36%
FTSE 250 - Fallers
Foresight Group Holdings Limited NPV (FSG) 409.50p -11.27%
Oxford Nanopore Technologies (ONT) 127.00p -8.70%
Ithaca Energy (ITH) 167.60p -4.99%
Endeavour Mining (EDV) 3,434.00p -4.93%
Telecom Plus (TEP) 1,444.00p -4.75%
XPS Pensions Group (XPS) 340.00p -4.36%
IP Group (IPO) 60.60p -3.35%
Future (FUTR) 614.50p -3.15%
SSP Group (SSPG) 148.00p -2.89%
Greggs (GRG) 1,614.00p -2.83%
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN