Best year in a decade for global stocks as $10trn piled into market

GLOBAL stocks have surged in their best year for a decade after being given new life by interest rate cuts and signs that turmoil over Brexit is ending.

More than $10 trillion (£7.6 trillion) was added to the value of shares around the world as central banks slashed rates and restarted money-printing schemes to battle an economic slowdown.

The MSCI World Index of global stocks has gained 25pc this year, bouncing back from its worst performance in a decade in 2018. This year was the best annual performance for stocks since 2009 and one of the strongest in decades.

In Britain, the FTSE 100 is up nearly 14pc and the mid-cap FTSE 250 has risen 26pc into new record territory, boosted by hopes of political stability and a smooth Brexit after Boris Johnson’s election victory this month.

The surge will have added billions of pounds to British workers’ pension funds. Recession worries stalked markets early in 2019 but the outlook has started to brighten again on hopes that the US trade war with China will come to an end, driving up global growth. Decisive action by central banks to ward off a slump propelled stocks higher this year. The US Federal Reserve and the European Central Bank have cut interest rates and changed course on plans to end or reverse their quantitative easing programmes, in which new money is created to buy state bonds and pump up the economy.

A “phase one” trade deal agreement between the US and China and an end to the Brexit deadlock have also reined in two key risks for investors.

Jonas Goltermann, of Capital Economics,

said: “A large chunk of the rise in equity markets this year appears to have come thanks to the substantial loosening of monetary policy, which has spurred an increase in valuations.”

Despite expectations of smaller market gains next year, analysts have predicted that UK stocks will outperform the rest of the world after the Conservatives’ election victory.

A third of investors believe the UK has the strongest prospects in 2020, well ahead of any other major world market, a poll by the Association of Investment Companies found.