FTSE 100 ends week at new closing high
A late update: The FTSE 100 share index has finished the day at a new alltime high of 8433 points.
That’s a gain of 52 points, or 0.6%, and means the blue-chip share index has racked up its third weekly gain in a row. It’s been on quite the rally since mid-April.
FTSE 100 on track to close at its 11th all time high of the last month. Only once since 1984 has it the UK large cap index achieved 12 all time highs in a rolling one month period. Will have seven trading days to match, or break that record. @John_Stepek
— Simon French (@Frencheconomics) May 10, 2024
Matt Britzman, equity analyst at Hargreaves Lansdown, says:
“It’s Friday afternoon, the sun’s out, and the FTSE 100 has closed at an all-time high – no this is not a dream. Investors are finally starting to look at UK businesses and see reasons to be optimistic. The Bank of England held rates steady earlier in the week but hinted at rate cuts to come. Meanwhile, economic growth came in better than expected, but crucially not too much better to drive up fears it could cause inflation to spike. This comes on the cusp of major UK banks reporting over the past couple of weeks, and there was a huge array of optimism from management teams around the outlook for the UK.
Many will look at this run and assume it has no legs, UK investors have been beaten down too many times in the past. UK bulls will argue it’s been long overdue, with the market suffering from a hefty valuation discount to global peers for some time. Next week’s jobs and wages data will be key for momentum, markets will want to see continued signs that stickier elements of inflation are easing, or it’ll raise fresh questions about if and when rate cuts might come.”
Closing post
Time to recap….
The UK is officially out of recession after figures showed the economy grew by 0.6% in the first three months of the year.
The Office for National Statistics (ONS) said the period from January to the end of March marked a return to growth after a mild recession in the second half of 2023. It was the strongest rate of quarterly growth since the end of 2021, and a better performance than expected by economists, who forecast growth of 0.4% in the first quarter.
The downturn came to an end after an increase in activity across the services sector, which has flourished since the turn of the year as wages have outstripped inflation, easing the pressure on consumers.
However, forecasters expect the UK to grow slowly this year as high interest rates and last year’s inflation surge continue to take their toll on disposable incomes.
The Bank of England has predicted that a lack of momentum in the economy means gross domestic product (GDP) will grow by only 0.5% this year. The Bank kept interest rates unchanged at 5.25% on Thursday but indicated it may begin cutting them from June.
Economists broadly hailed the pick-up in growth, which suggests the UK economy may do better this year than expected.
Here’s the full story:
And our analysis:
Optimism over economic prospects, and hopes that interest rates will soon be cut, helped to push the UK’s FTSE 100 to a new intraday high of 8455 points today – on track for another strong week.
And in other news:
