The FTSE 100 rose above 8,000 points for the first time in its history as traders cheered better-than-expected inflation figures.
The London Stock Exchange’s blue-chip index surged to a record high of 8,003.65 before falling back slightly to close at 7997.83.
It was the latest milestone in a barnstorming start to the year.
Record high: The London Stock Exchange’s blue-chip index surged to 8003.65 before falling back slightly to close at 7997.83
Stocks climbed as inflation fell to 10.1 per cent in January, lower than the 10.3 per cent analysts had forecast. It was 10.5 per cent in December.
The figures have led to hopes inflation has peaked and make it less likely that the Bank of England will raise interest rates further than markets had anticipated. T
he index’s biggest risers included housebuilder Persimmon, fashion house Burberry and Premier Inn-owner Whitbread, which have all been hit hard by the cost of living crisis.
Laith Khalaf, head of investment analysis at AJ Bell, said it marked a ‘redemption day’.
He said: ‘The 8,000 level is a purely psychological milestone, but investors in the UK stock market will be happily counting their coffers after a year in which it has been one of the best-performing major markets.’
He added: ‘Pension and ISA valuations will be looking pretty healthy thanks to the performance of the FTSE 100 and the continued resurgence in the US stock market since the turn of the year.’
Sophie Lund-Yates, analyst at Hargreaves Lansdown, said: ‘The recent momentum has been astounding in its speed, and highlights that the outlook for UK plc has turned a corner.’
The FTSE 100, which includes other household names such as HSBC, Tesco and JD Sports, was also boosted by a fall in the value of the pound against the dollar.
A weaker pound boosts the earnings of international companies on the FTSE 100 which earn their revenues in dollars.
Analysts believe the US Federal Reserve may have to keep rates higher for longer, which would prop up the value of the dollar. Sterling dropped 1.4 per cent to $1.20.
Meanwhile Mark Mullen, chief executive of digital bank Atom said it plans to list in the UK – a major boost to the City, which has been trying to lure more home-grown tech firms to float here.
Many have opted for the US, which is a hub for tech firms.
Policymakers are in desperate talks to attract British semiconductor group ARM to float in London.
Atom – valued at £460million in November – was linked with a possible listing in New York last year.
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