UK's FTSE 100 share index hits all-time high

  • World
  • Saturday, 04 Feb 2023

LONDON, Feb. 3 (Xinhua) -- The FTSE 100 index, the leading benchmark for blue chip companies listed in the United Kingdom (UK), hit an all-time high of 7,906.58 on Friday afternoon and then closed at a new record of 7,901.80.

Most of company earnings come from overseas which, coupled with the more recent weakness in sterling, means that these earnings become more valuable on repatriation, explained Richard Hunter, head of markets at the online investment service interactive investor.

The British pound sank to a new low on Friday afternoon and traded below 1.21 against the U.S. dollar. Friday's surge of the U.S. currency was in part triggered by strong U.S. jobs data, which sent the dollar soaring against the pound, Hunter said.

The gains also came when global markets were uplifted by slowing inflation and hopes of a lower pace of interest rate increases.

After raising its bank rate by 0.5 percentage points, the Bank of England on Thursday implied that rate was very close to its peak, according to economist Paul Dales at Capital Economics consultancy.

Hunter noted that the FTSE 100 index is not an accurate barometer of the UK economy. Instead, the all-time high "comes at a time when the UK economy is far from being in a good shape."

"High inflation, rising interest rates, falling real wages and a cost-of-living crisis for many are real headwinds. At the same time, the country is hostage to any number of strike actions, which have inevitably impacted productivity," he said.

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