Footsie races to record high as investors bet on interest rate cuts in US
- UK’s blue-chip index tops 9600 for first time as Wall Street scales fresh peaks
The FTSE 100 raced to a new high after US inflation figures paved the way for further interest rate cuts in the world’s biggest economy.
In a strong end to the week for investors, London’s index of blue-chip stocks built on Thursday’s previous peak to close 0.7 per cent or 67.05 points higher at 9645.62 on Friday.
It was the first time the Footsie has traded above 9600 and fuelled speculation on trading floors across the City it could hit 10,000 by the end of the year.
Wall Street also scaled new highs.
Traders in the City of London are hoping the Footsie can hit 10,000 by the end of the year
The rally came after official figures in Washington – delayed earlier this month by the US government shutdown – showed inflation hit 3 per cent in September.
While that was up from 2.9 per cent in August, it was weaker than the 3.1 per cent feared by analysts, paving the way for the US Federal Reserve to cut rates once again on Wednesday next week.
Investors expect a further two cuts by March next year.
Eric Gerster, chief investment officer at AlphaCore Wealth Advisory, said the data was ‘quite positive’ and ‘certainly clears the way for the Fed to cut rates next week and leads to a higher expectation of at least two more cuts’ by March.
The Footsie has gained 18 per cent so far this year having bounced back strongly following a dip in the wake of Donald Trump’s Liberation Day tariff announcement in April.
Sentiment in London was boosted on Friday by upbeat corporate results – including from banking giant NatWest – as well as better than expected retail sales figures.
The Office for National Statistics said sales rose 0.5 per cent in September as demand for gold and the new iPhone 17 boosted business.
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