The UK stock market hit a record high on Tuesday as shares rose on hopes of lower interest rates and easing geopolitical tensions.
The London-listed FTSE 100 index of blue-chip stocks hit 8,068 on Tuesday, surpassing its previous high of 8,047 set in February 2023.
It closed at 8,023 points on Monday, its highest closing price ever.
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The FTSE hit a new all-time high as Citi investors expected two rate cuts in the UK this year, with the first fully priced in in August. Last Friday, Bank of England Deputy Governor Sir Dave Lumsden predicted that UK inflation could be lower than expected over the next three years and remain close to the Bank of England’s 2% target. The highest inflation rate is currently 3.2%.
This has caused the pound to fall, currently trading at around $1.2340, its lowest since November, and pushing up the prices of multinational companies whose dollar profits are worth more in pound terms.
Britain’s economy fell into a shallow recession at the end of 2023, but the FTSE 100 index has risen about 4% since the start of the year amid growing optimism that it will return to growth in 2024.
As a result, it has lagged behind other European indexes, with France’s Cac and Germany’s Dax up 6.5% since the start of the year.
The FTSE 100 was established on January 3, 1984 and was priced at 1,000 points. It quickly eclipsed the FT30 index, which until now had been the barometer of London market movements.
The FTSE 100 now has a market capitalization of around £2 trillion, with its 100 constituent companies – from banks and mining companies to retailers, airlines and house builders – collectively worth $2.97 trillion ( That means it is lower than Microsoft (about £2.4 trillion).
