The FTSE 100 index, a measure of the performance of the largest 100 companies listed on the London Stock Exchange, reached an all-time high on Tuesday, driven by a weaker pound and optimism about easing tensions in the Middle East. However, the index retreated later in the day, ending with a modest gain of 0.26% at 8,044.81 points, as comments from Bank of England chief economist Huw Pill dampened hopes of an imminent interest rate cut.
Pill stated that while rate cuts may be “somewhat closer” than last month, the economic outlook “has not changed substantially” and cautioned against reducing rates too early. The Bank’s Monetary Policy Committee (MPC), which is responsible for setting interest rates, will make its next decision on May 9th.
A weaker pound helped push the FTSE 100 to its new high in the morning, but the currency strengthened over the course of the day, closing up 0.66% against the US dollar and 0.29% against the euro. Associated British Foods, the owner of Primark, was the FTSE’s top riser after posting a 37% increase in pre-tax profit for the year ending March 2nd. JD Sports Fashion’s stock also jumped after the company announced a $1.08 billion deal to acquire American sportswear retailer Hibbett.
Despite the setback on Tuesday, the FTSE 100 remains near its all-time high, and analysts continue to be optimistic about the outlook for UK stocks in the medium term.
