FTSE 100 hits new record high

- Broader UK market performance bodes well for economic recovery

The FTSE 100 closed today at a record all-time high of 7,900, surpassing the previous record close of 7,877 set in May 2018.

The FTSE 250, which is more directly related to the fortunes of the UK economy, is still a little way short of the levels it held in May 2018 and is some 15% below its all-time high set in 2021.

Richard Stone, Chief Executive of the Association of Investment Companies (AIC), commented: “With headlines dominated by the cost of living crisis, war in Ukraine, rising interest rates and strikes, it may seem strange that the index of the largest 100 companies listed on the London Stock Exchange has set a new all-time high. This has been driven by the strong performance of oil and gas companies and banks, which dominate the FTSE 100.

“The FTSE 250 is more diverse and contains companies more focused on the UK. It is some way below its record highs. However, it has performed well recently and is up over 20% from the levels it dipped to last October.

“Markets are forward-looking. They tend to turn ahead of the overall economic indicators and are adding some weight to the Bank of England’s view that the UK economy might be turning a corner. We may still be heading into a recession, but markets now believe inflation has peaked and are looking ahead to a time when rates may start falling once again.

“In these uncertain times, the key to successful investing is maintaining a diversified portfolio. Investment companies offer exposure to global markets and a wide range of asset classes. If the markets are right to foretell the turning of the economic tide, investment companies are likely to benefit. In the past, brave investors who have bought investment companies when times are tough have profited in the long run.”