The UK’s FTSE 100 has reached its highest ever level following a rally for the index helped by miners and housebuilders amid rising hopes of further interest rate cuts.
London’s top index surpassed the previous record of 8,474.41 set in May last year.
It surged more than 1% shortly after markets opened on Friday morning to a high of 8,480.57.
It finished up 1.35% for the day at 8,505.22, having reached a fresh all-time peak of 8,533.43 during the session.
Most stocks were moving higher – with miners Antofagasta, Glencore and Anglo American, and housebuilders Persimmon, Taylor Wimpey and Barratt Redrow among the biggest risers.
Meanwhile, the pound weakened against the US dollar, dropping 0.47% to 1.217 dollars on Friday morning.
A weaker pound can have an inverse effect on the FTSE 100, which is internationally-focused and tends to be bolstered by a stronger dollar.
Richard Hunter, head of markets at Interactive Investor, said the rally came as a surprise on Friday morning.
He said: “US markets faltered after a blowout session the previous day, while the surprising upstart came in the form of the FTSE 100, which has set the early pace and blew past its previous record high in opening trade.
“The housebuilders were also strong, given a combination of potentially lowering interest rates and some recent updates which have shown robust forward order books, with rises of 2% or more for the likes of Persimmon, Taylor Wimpey, Barratt Redrow and Berkeley Group.
“The FTSE 100 is now ahead by 3.5% this year, and marginally ahead of the previous record level set last May.”
A string of key economic data published in recent days has helped boost chances of an interest rate cut when the Bank of England next decides in February.
A surprise dip in the rate of Consumer Prices Index (CPI) inflation, to 2.5% in December from 2.6% in November, is expected to encourage policymakers that rates can be reduced further.
And new gross domestic product (GDP) data on Thursday showed the UK economy edged up by 0.1% in November, slower than economists had been expecting.
The lower-than-forecast data added to calls that the Bank will opt to ease monetary policy to help boost the economy.
The recent data also helped calm the financial markets following a period of turmoil that saw the pound drop sharply and the cost of government borrowing rise to decades-high levels.
On Friday, the yield on government bonds, also known as gilts, was declining.
The 30-year gilt yield was down about five basis points to 5.19%. Earlier in the week, the yield had risen to peak at about 5.46%.
The 10-year gilt yield was also down around five basis points to 4.63%, having hit 4.9% earlier in the week.
