FTSE 100 hits record high in wake of interest rate increase

THE FTSE 100 closed yesterday at a record high of 7,560.35 points.

It tops the previous record closing high on October 12, when the bluechip index reached 7,556.24.

The record high came the day after the Bank of England raised the interest rate for the first time in a decade.

The FTSE – an index of the companies listed on the LSE – summarises the performance of companies’ shares. The more people want to buy shares of a company, the higher up it will go up the index. So when people are investing in shares the FTSE will go up, when people are selling or not buying shares it will fall. Admiral Group is Wales’ only FTSE 100 company

David Madden, a market analyst at CMC Markets UK, suggested that the UK stock market may be poised for further gains.

He said: “The FTSE 100 is comfortably above the 7,500 mark and the upward trend it has been in since midSeptember is still intact, so ... the wider bullish move could continue.”

“The FTSE 100 had a strong start to the session as the pound was still suffering from the Bank of England update yesterday. But a combination of a robust rise in the growth rate of the UK services sector and the mediocre US non-farm payrolls figure pushed the pound higher, and we saw the FTSE 100 turn over on itself.”

Earlier in the day, Bank of England deputy governor Ben Broadbent signalled that the Bank is ready to pull the trigger on more interest rate increases.

Mr Broadbent said he anticipates a “couple” of further hikes as part of measures to get Brexit-fuelled inflation, which is currently at 3%, back on track.