The UK's FTSE 100 index reached its highest ever level on Friday, driven by gains in mining and housebuilding sectors as investors anticipate further interest rate cuts.
The UK's FTSE 100 index soared to an all-time high on Friday, driven by gains in mining and housebuilding sectors amid growing expectations of further interest rate cuts. The index surged over 1% shortly after markets opened, reaching a peak of 8,480.57. It closed the day up 1.35% at 8,505.22, having briefly touched an all-time high of 8,533.43 during the session.
Miners Antofagasta, Glencore, and Anglo American, along with housebuilders Persimmon, Taylor Wimpey, and Barratt Redrow, were among the biggest contributors to the rally. Meanwhile, the pound weakened against the US dollar, falling 0.47% to 1.217 dollars. A weaker pound can often benefit the FTSE 100, as it is an internationally-focused index that tends to strengthen when the dollar is strong.Richard Hunter, head of markets at Interactive Investor, expressed surprise at the rally, noting that US markets had declined after a strong previous session. He attributed the FTSE 100's surge to a combination of factors, including anticipation of lower interest rates and positive updates from housebuilders regarding robust order books. Hunter pointed out that the FTSE 100 is now 3.5% higher this year and has surpassed its previous record set in May. Recent economic data, including a dip in inflation to 2.5% in December and slower-than-expected GDP growth in November, have fueled expectations of an interest rate cut by the Bank of England in February. These developments have also calmed financial markets that experienced turmoil earlier in the year, leading to a decline in gilt yields
FTSE 100 UK Economy Interest Rates Mining Housebuilding
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