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FTSE 100 hits new all-time high as markets bet on interest rate cut

The stock value of London's 100 largest listed companies has grown 2.7 per cent in the last week, off the back of economic data that suggests the Bank of England may cut interest rates more aggressively than expected.

The logo of the London Stock Exchange(Image: Getty Images)

The FTSE 100 has reached a new record high this morning, surpassing its previous peaks from last spring. The value of London's top 100 listed companies has increased by 2.7 per cent over the past week, spurred on by economic data suggesting that the Bank of England may implement more aggressive interest rate cuts than anticipated.

The FTSE 100's prior all-time high was achieved earlier this year on 15 May, with an intra-day peak of 8,474.71. Today, it hit a new intra-day high of 8,480.36, growing 0.9 per cent in the morning before slightly retreating, as reported by .

This news follows Tuesday's better-than-expected inflation data and further indications of the 海角视频 economy's struggle to perform. Services inflation, a key measure of persistent inflation, dropped to 4.4 per cent, its lowest since March 2022.

Meanwhile, 海角视频 GDP for December fell short of expectations, with the economy only expanding by 1.1 per cent, while retail sales dipped by 0.3 per cent throughout the month.

A view of the Bank of England (Image: PA Archive/PA Images)

These data points provide the Bank of England with justification for quicker interest rate cuts than markets had predicted, with financial markets suggesting only 0.5 per cent of cuts throughout 2025.

The index has also been aided by the pound's depreciation against the dollar since September, which boosts the revenue of companies conducting business overseas. Sterling has dropped to just $1.218, compared to $1.342 in September.

"Three quarters of companies in the FTSE 100 generate their earnings overseas, and the relative value of those foreign earnings is boosted when the pound weakens," explained Dan Coatsworth, an investment analyst at AJ Bell.

"The natural resources sector was also lifted by merger and takeover chatter, encouraging investors to bid up shares in the likes of Glencore and Anglo American."