UK Market Update – May 2025

Analysis, Halal Investment, Market Analyses, Market News |

Assalamu Alaykum,

Welcome to our monthly economic and market update! As we enter a new month, here’s a recap of the key economic and market developments in the UK for May. Let’s get started.

Stock market updates

May brought a welcome rebound for UK markets, reversing the previous month’s losses. The FTSE 100 Index rose by 3.24%, closing at £8,772, while the FTSE All-Share Index climbed 3.60% to finish at £4,759. Renewed investor optimism and easing economic concerns helped drive gains across both major indices.

  • GSK and Spero Therapeutics have concluded their Phase 3 trial for tebipenem HBr earlier than planned after meeting the primary efficacy goal in treating complicated urinary tract infections (cUTIs). The oral antibiotic demonstrated comparable effectiveness to IV imipenem-cilastatin, with no unexpected safety issues—most common side effects were diarrhea and headache. GSK now plans to submit the results to the FDA later this year, positioning tebipenem HBr as a potential first-in-class oral carbapenem treatment for cUTIs.
  • Pets at Home reported a 14.1% increase in statutory pre-tax profit to £120.6 million for the year ending March 27, 2025, driven by strong growth in its veterinary division and reduced non-underlying costs. While retail revenue declined by 1.8% to £1.3 billion due to weaker consumer demand for discretionary items, the Vet Group saw a 13% revenue increase, benefiting from higher patient visits and investments in advanced diagnostics. The company maintained its profit guidance for fiscal 2026 at £115–125 million, reflecting cautious optimism amid ongoing economic pressures.
  • Softcat PLC has raised its full-year profit guidance following a strong third-quarter performance. The IT infrastructure provider now anticipates operating profit growth in the low double-digit percentage range, up from previous high single-digit expectations. This upgrade is attributed to robust demand across its service offerings and an encouraging pipeline for the second half of the year.
  • Hill & Smith Holdings PLC reported that U.S. tariffs have not significantly impacted its operations, as increased raw material costs have been offset by price adjustments. The company confirmed that trading remains in line with expectations, with its U.S. businesses—contributing approximately 76% of operating profit—continuing to perform strongly. However, the outlook for its U.K. operations remains challenging due to public sector budget constraints.
  • RS Group reported a 10% decline in adjusted pre-tax profit to £248 million for the year ending March 31, 2025, as revenue dipped 1% to £2.9 billion amid ongoing industrial sector weakness. The company cited subdued demand and limited short-term visibility, though it noted signs of stabilization and potential market improvement in the latter half of the fiscal year. To support growth initiatives, RS Group plans to continue elevated levels of organic investment, despite anticipating some short-term dilution to operating profit margins due to ongoing cost inflation and integration expenses from recent acquisitions.

Top gainer and top loser Halal stocks in the UK

Economic updates

  • UK inflation unexpectedly jumped to 3.5% in April from 2.6% in March, its highest level since January 2024, driven largely by a spike in airfares during the Easter holiday. The increase surpassed both the Bank of England’s forecast of 3.4% and economists’ expectations of 3.3%, marking the sharpest monthly rise since the 2022 inflation surge.
  • UK grocery inflation surged to 4.1% in the four weeks to May 18, the highest rate in 15 months, driven by higher payroll taxes and the national minimum wage increase in April, according to Kantar. This marks an uptick from 3.8% in the previous month and adds to broader cost-of-living pressures already impacting UK households. Kantar noted that consumers typically adjust spending habits once inflation crosses the 3–4% threshold.
  • UK energy regulator Ofgem announced a 7% reduction in the energy price cap starting in July, lowering average annual household bills to £2,013. While this marks the first cut in nearly a year and offers some relief amid rising inflation and high grocery costs, prices still remain about 50% higher than pre-crisis levels in 2021. Consumer advocates welcomed the move but stressed it falls short of easing the burden on low-income households.
  • UK vehicle production fell 15.8% year-on-year in April to 59,203 units, marking the worst start to the year since 2009, according to the Society of Motor Manufacturers and Traders (SMMT). The slump was attributed to weak export demand, fewer production days due to Easter timing, and broader global challenges like U.S. auto tariffs and fierce competition. Exports to key markets, the EU and U.S., dropped by 19.1% and 2.7% respectively.

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