Surge in energy stocks helps push the FTSE 100 to two-month high

The FTSE 100 has jumped to a more than two-month high despite a new Organisation for Economic Co-operation and Development (OECD) report casting an unmissable shadow over the UK’S economic prosperity.

Energy giants moved to the top of London’s bluechip index with the likes of Shell, BP and Harbour Energy all seeing their shares rise by more than 4%.

The boost comes despite the OECD predicting the UK’S economy will contract more than any other of the world’s seven most advanced nations next year.

It is expected to shrink by 0.4% in 2023 and grow by just 0.2% in 2024.

Nevertheless, investors flocked to the London Stock Exchange as oil prices saw a rebound, helping to push up the FTSE.

The FTSE 100 closed 75.99 points higher, or 1.03%, at 7,452.84.

Joshua Mahony, senior market analyst at online trading platform IG, said: “European markets have provided an area of optimism today, with equities outperforming their US counterparts despite growth concerns raised by the OECD.

“Quite how much markets are listening to the OECD is questionable, with both the FTSE 100 and pound gaining ground despite claims that we will see a measly 0.2% growth in 2024 after next year’s contraction.

“While the effects of Brexit have been largely masked by the Covid pandemic, the outlook remains bleak over our ability to grow our way out of this current crisis.

“Nonetheless, with the Bank of England likely to take a more accommodative stance once inflation is brought under control, the ability to predict when the UK returns to health will be reliant on driving down prices. Unfortunately, the OECD predict that the UK energy price cap will serve to lift inflation, thus limiting the ability to combat the stagflation that is expected to dominate 2023.”

Yesterday sterling was around 0.5% higher at 1.1876 against the dollar, and 0.2% higher at 1.1559 against the euro when European markets closed.

Quite how much markets are listening to the OECD is questionable