The London stock market’s record-breaking run accelerated yesterday as the FTSE 100 scaled new highs – sparking predictions it is on course to hit 11,000.
On another bumper day for investors, it passed 10,700 before closing up 1.2 per cent, or 130.01 points, at 10,686.18.
The blue-chip index has gained nearly 8 per cent this year on top of a sparkling 2025 when it clocked up its best performance since the aftermath of the financial crisis.
‘It was a red-letter day for the FTSE 100 as it broke 10,700 for the first time and enjoyed its biggest daily gain since early January, with another record close,’ said AJ Bell head of markets Dan Coatsworth.
Mining stocks led the charge, with Antofagasta up 10.6 per cent and Fresnillo climbing by 4.8 per cent, as copper, gold and silver prices rallied.
Defence stocks were also boosted by stellar figures from BAE Systems.
Record high: On another bumper day for investors, the FTSE 100 passed 10,700 before closing up 1.2%, or 130.01 points, at 10,686.18
A fall in UK inflation to 3 per cent fuelled hopes of interest rate cuts soon, further lifting morale and keeping sterling under pressure, a move which helps swell blue-chip earnings overseas.
‘Investors keep piling into UK assets as these hardly feature battered technology or software stocks, and instead benefit from high energy and precious metal prices,’ said Axel Rudolph, senior financial analyst at IG.
‘With valuations around half of their US peers, UK indices remain an attractive proposition for many investors, propelling the FTSE 100 to record highs, towards the 11,000 mark.’
The more domestically-focused FTSE 250 also edged higher, rising 0.6 per cent, or 130.62 points to 23686.44, and is around 2 per cent off its 2021 peak.
Analysts said the fall in inflation from 3.4 per cent in December to a ten-month low of 3 per cent in January paves the way for further Bank of England interest rate cuts.
Katharine Neiss, chief European economist at investment manager PGIM, expects rate cuts in March, April and June – taking it to 3 per cent.
‘The UK economy is weak and requires lower rates,’ she said.Kallum Pickering, chief economist at Peel Hunt, said the bleak jobs figures combined with the drop in inflation ‘strengthen the call for a March cut’.
With the Bank expecting inflation to return to its 2 per cent target this spring, Pickering said it may have ‘fallen behind the curve and will need to play catch-up’ by cutting rates more aggressively.
Jeremy Batstone-Carr, European strategist at Raymond James Investment Services, said: ‘The only question left to answer is not “if” but “when?” will interest rates be cut again. The chances of a further rate cut next month have undoubtedly been bolstered.’
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