FTSE 100 hits record as interest rate hopes push down UK borrowing costs
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Nearly every share on the index rises as fall in value of pound helps multinational companies listed in London. The UK’s blue-chip stock index hit a record high on Friday, as rising hopes of interest rate cuts this year drove down government borrowing costs.
Almost every share on the FTSE 100 rose on Friday, as a fall in the value of the pound boosted multinational companies listed in London and propelled the index above 8,500 points for the first time. The “Footsie”, which tracks the UK’s 100 biggest companies, rose 1.5% to hit a fresh intraday high of 8,521.78 points amid growing confidence that the Bank of England will ease monetary policy this year.
A three-day rally has driven the FTSE 100 over its previous record high of 8,474 points, set in May 2024. It has gained about 4% since the start of the year, amid wider gains on global stock markets. The rally was spurred by weaker-than-expected UK retail sales figures for December released on Friday, after economic data earlier this week showing inflation fell last month while the economy only grew modestly in November. This could encourage Bank policymakers to cut rates to 4.5%, from 4.75%, at their next meeting in early February, to support the economy.
“The FTSE 100 pushed sharply higher as a fresh bout of weak economic data poured cold water on the notion that the Bank of England would have to take a patient approach in the face of burgeoning inflation pressures,” said Joshua Mahony, an analyst at Scope Markets.
