FTSE 100 Reaches Record High Amid Economic Shifts

The UK's FTSE 100 index hit a record high as a weaker pound and declining retail sales fueled speculation about an interest rate cut. The market witnessed gains in major companies and saw increased chances of rate cuts by the Bank of England. This economic shift affected various sectors.

The UK's premier stock market index, the FTSE 100, surged to a new all-time high on Friday. Contributing factors included a weaker pound and a significant drop in December retail sales, raising expectations for a potential interest rate cut next month.

The midcap FTSE 250 also experienced gains, marking its best weekly performance since October 2023, amid hopes that the Bank of England (BoE) will ease its monetary policy. This sentiment was further supported by lower gilt yields and a declining sterling, which benefited companies with substantial overseas earnings.

Key shares saw remarkable increases, including Shell and Unilever, while attention is drawn to potential policy changes under incoming U.S. President Donald Trump. Notably, Smiths Group rose sharply following calls from an activist investor to consider a sale. The market remains poised as investors brace for upcoming economic announcements.

(With inputs from agencies.)