FTSE 100 - August 2025

27/08/25

The FTSE 100 advanced steadily through August after a volatile start. Following its biggest one-day drop in ~4 months on Aug 1, bank-led strength drove a rebound and a push to record territory. The index crossed 9,200 mid-month and set a new all-time close of  9,321.40 on Aug 22 (with an intraday high just above 9,350). By late August, the FTSE was up ~2–3% MTD, aided by resilient UK data, supportive rate expectations, and upbeat blue-chip earnings.

Key drivers 

• Policy & rates: The BoE cut 25 bps to 4.0% on Aug 7 (split 5–4), initially weighing on exporters as Sterling firmed, but the broader outlook of easier policy underpinned risk assets. Softer U.S. inflation in mid-August boosted Fed-cut hopes into September, lifting global equities. The Jackson Hole Federal Reserve symposium (Aug 21–23) kept caution in play without breaking the uptrend. 
• Inflation & growth: UK CPI rose to 3.8% YoY in July (from 3.6%). Markets largely looked through the surprise; some still expect gradual BoE easing. Q2 GDP ~0.3% QoQ and the strongest services PMI in a year reinforced a “Goldilocks” narrative – modest growth and cooling (if sticky) prices. 
• Earnings & style shift: H1 results from insurers and banks were broadly strong. A global rotation away from U.S. big tech into value/defensives benefited the FTSE’s sector mix (financials, staples, energy).
   

Notable movers 

• Lloyds Banking Group: +9% on Aug 4 after a Supreme Court ruling eased motor finance commission liabilities; UK banks rallied in sympathy. 
• Admiral Group: +6.6% on Aug 14 on record H1 profit (~+67% YoY) and a higher interim dividend. 
• Aviva: Hit a 17-year high after reporting +22% operating profit and raising its dividend. 
• InterContinental Hotels (IHG): +5.8% on Aug 7 on better-than-expected H1, offsetting the BoE-day wobble. 
• Centrica: +3.7% on Aug 14 on a deal to co-acquire National Grid’s Grain LNG terminal (~£1.5bn).

Sector snapshot

Financials (leaders): 

• Insurers surged on earnings: sector gauges jumped (e.g., life +~1.5%, non-life +1.9% on Aug 14). 
• Banks spiked Aug 4 as legal risk faded, then traded mixed with shifting rate-cut odds. 
• Dispersion: Beazley −12.3% on Aug 13 after trimming premium-growth guidance (cyber/property).
  
  

Consumer:

• Staples (Unilever, Reckitt, Tesco) rose +1.2% to +3.2% on Aug 20 as investors sought dependable cash flows. 
• Discretionary uneven: WH Smith (FTSE 250) −42.34% on Aug 21 after a North America profit warning; homebuilders slipped ~1% mid-month on rates/asking-price data. 
• Healthcare: Sector +~1.8% on Aug 20; Convatec buyback helped, while Hikma −7.1% on Aug 7 after cutting a key margin outlook. 
• Industrials/defence: BAE Systems hit record highs on backlog/geopolitics; Rolls-Royce added ~2.3% early August; Babcock (FTSE 250) +5% on an upgrade Aug 18. Mixed elsewhere (e.g., Diploma −3% on CFO exit vs Smiths/Melrose edging up).
  
  

Energy & materials:

• The energy sector was mixed, then firmer late month with oil’s rebound: BP rose ~1.8% on Aug 4 on a large Brazil discovery; Harbour Energy (+8.9% in one day) and Ithaca (+10% on Aug 20) jumped on stronger output guidance, though Harbour fell 4.8% on Aug 14 with softer crude. 
• Mining lagged on China demand worries and a stronger USD (Rio, Anglo, Glencore); Fresnillo benefited when gold firmed. 
• Utilities: Quiet-positive, with sentiment helped by infrastructure transactions (e.g., the LNG deal involving Centrica).

Technicals 

• Trend & breadth: Price held above the 50- and 200-day MAs all month; the early-August break above ~9,048 turned prior resistance into support. Dips to the 9,030–9,100 area attracted buyers.

Levels: 

• Supports: 9,133–9,153, then ~9,075 (Aug 7 swing low) and 9,027 (early-Aug low). A close below ~9,050 would warn of a short-term trend break, opening 8,900–8,700. 
• Resistance/targets: With new highs >9,300, next reference is psychological round-numbers and a ~9,374 Fibonacci extension if momentum resumes. 
• Momentum: RSI negative divergence appeared near the weekly peak (~9,222), flagging near-term consolidation risk after the breakout. So far, pullbacks have been shallow.
  

Bottom line & watch-list 

The FTSE 100 enters September with a constructive setup: fresh highs, supportive (if cautious) policy expectations, and leadership from insurers/banks plus staples/defence. Risks centre on inflation surprises, a shift in Fed/BoE path post-Jackson Hole, and China-sensitive miners. Holding ~9,075–9,150 would keep the path open to retest/extend above 9,300; losing ~9,050 would raise the odds of a deeper pullback.

This article is for informational purposes only and does not constitute investment advice, a personal recommendation, or an offer or solicitation to engage in any investment activity. The mention of any security, commodity or issuer should not be interpreted as a recommendation to buy or sell. Any views expressed are based on public information believed to be reliable at the time of writing, but no representation or warranty is given as to its accuracy or completeness. 

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