The FTSE 100 Index in London has risen to an all-time high of 7905.
The 100 most valuable firms on the London Stock Exchange, as measured by the Financial Times Stock Exchange index, broke the previous mark of 7,903.5 established in May 2018.
As they believe inflation has peaked, central institutions, notably the Bank of England and the US Federal Reserve, have signalled this week that their programmes of interest rate increases have moderated or may be doing so.
The Bank reiterated its assessment that the UK economy is on track to enter a technical recession, which is defined as two consecutive quarters of economic contraction. At the end of last week, however, the Bank offered a less pessimistic economic prognosis.
It also hinted that the most recent increase, which increased borrowing costs by bringing the interest rate to 4%, would be the last for some time.
The announcement of US jobs was the most recent positive development for the world economy. The Bureau of Labor Statistics said on Friday afternoon that 517,000 jobs were gained in January, much exceeding the 185,000 projected.
The US inflation rate looks to have peaked at 6.5% in the first month of this year, at the same time.
The comparatively encouraging words from monetary policy decision-makers have helped to support the FTSE 100 blue-chip index, which is thought to be financially strong.
China’s loosened lockup regulations are another factor driving the FTSE.
The economy was effectively reopened to the world under the new, laxer COVID-19 regulations. Travel to and from the second-largest economy in the world has become easier, and industry lockdowns, which have hampered supply chains, are thought to be a thing of the past, raising hopes of a global economic rebound.
The FTSE 100 is made up of a wide range of strong businesses that operate internationally and are not entirely dependent on the strength of the UK economy.
They include the beverage juggernaut Coca-Cola, the oil tycoon Shell (which last week recorded record earnings), and Centrica, owner of British Gas.
The index also includes multinational banks like HSBC, pharmaceutical businesses like GSK, and fashion brands like Burberry.
The most well-known index in the UK, which has been inching closer to the record high for weeks, had a good start to 2023. In just three weeks of the new year, it had increased by just less than 5.5%, outpacing the 0.9% growth it managed for the entire year of 2022.
The market capitalization of the companies that make up the index, or the total value of shares issued, is the highest on the London Stock Exchange.
The index was introduced in 1984 with a 1,000 initial score.