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\n Published on
\n 29\/07\/2025 – 15:16 GMT+2\n <\/p>\n
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After years of political turbulence in Westminster and post\u2011Brexit economic whiplash that drove capital away, the current US policy chaos has propelled global investors back to London, turning the UK into 2025\u2019s unlikely safe haven.<\/p>\n
\u201cCertain investors believe the US is a much higher-risk investment prospect under Trump and they\u2019ve taken money off the table and reallocated to other parts of the world including the UK,” according to Dan Coatsworth, investment analyst at AJ Bell.<\/p>\n
“This is a dramatic shift in thinking, given that the US has been a top place to make money for years.”<\/p>\n
US President Donald Trump’s administration has spent most of 2025 imposing, scrapping and re-imposing tariffs on its biggest trading partners and allies.<\/p>\n
“Political stability since last summer\u2019s general election, along with the UK being the first to strike a trade agreement with the US under the Trump administration, have prompted certain overseas investors to think again about the UK\u2019s situation and prospects,” Coatsworth continued.<\/p>\n
The FTSE 100 Index broke the 9,000 valuation record in mid July, taking it nine times above its baseline of 1,000.<\/p>\n
The index\u2019s previous major milestone came in February\u202f2023, when it briefly pushed past 8,000.<\/p>\n
US dollar in freefall amid fights with the Fed<\/p>\n
In May, Moody’s downgraded the United States’ credit rating from AAA to AA1, marking the first time in over a century that the US no longer held a triple-A rating from any major credit agency.<\/p>\n
Last week, footage of Federal Reserve Chair Jerome Powell went viral as he stood next to Trump during a visit to the Fed building, with the bank chief shaking his head in apparent disagreement.<\/p>\n
Trump’s criticism of Powell \u2014 who is arguably the most powerful guardian of the dollar’s value \u2014 has aggravated the currency\u2019s steady slide since the new administration took office in January.<\/p>\n
\u201cDollar weakness will have spurred UK investors to look closer to home for opportunities. A weaker dollar versus the pound makes US assets less attractive,” explained Coatsworth.<\/p>\n
Although the greenback has risen in recent days, the dollar index is still down almost 9% in the year to date.<\/p>\n
Defence is a money magnet<\/p>\n
Trump’s departure from US foreign policy norms, for instance by demanding that Europe pay more for NATO while sending positive signals to Russia, has shocked leaders across the continent, undermining global security.<\/p>\n
Interest in government defence spending across the EU and the UK has risen at a record pace since the Cold War, with some governments fast\u2011tracking multibillion\u2011euro deals for the procurement of missiles, drones and cybersecurity systems. <\/p>\n
This environment has made Europe\u2019s defence contractors prime targets for fresh capital as investors look for assets that can outpace geopolitical shockwaves.<\/p>\n
Fresnillo, Babcock and Rolls-Royce, all either defence contractors or working on defence-adjacent projects, are the best-performing FTSE stocks so far in 2025.<\/p>\n
\u201cThe UK stock market has a wealth of defence contractors which have attracted investor interest against a backdrop of increased government spending on areas like cybersecurity and military forces,” Coatsworth added.<\/p>\n
A bargain for investors?<\/p>\n
\u201cValuation is another reason the UK has functioned as a magnet for people switching out of US markets,” said Coatsworth, as FTSE stocks are cheaper than US alternatives.<\/p>\n
\u201cAmerican shares are expensive when you look at popular valuation metrics. For example, the S&P 500 index trades on 22.2 times next 12 months\u2019 earnings … In contrast, the FTSE 100 trades on a mere 12.6 times forward earnings.”<\/p>\n","protected":false},"excerpt":{"rendered":"Published on 29\/07\/2025 – 15:16 GMT+2 ADVERTISEMENT After years of political turbulence in Westminster and post\u2011Brexit economic whiplash…\n","protected":false},"author":2,"featured_media":31207,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[141,17474,59,57,58,50,4780,19127,1186,56,54,55,4953],"class_list":["post-31206","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-kingdom","tag-donald-trump","tag-european-markets","tag-gb","tag-great-britain","tag-greatbritain","tag-news","tag-shares","tag-trade-agreement","tag-trump-tariffs","tag-uk","tag-united-kingdom","tag-unitedkingdom","tag-world-markets"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/31206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=31206"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/31206\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/31207"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=31206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=31206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=31206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}