London's blue-chip index, the FTSE 100, has surged past the significant 10,000-point threshold, marking a strong start to 2026. This milestone follows a stellar performance in 2025, which was the index's best year since the recovery from the 2009 financial crash.
Market Highs and Political Claims
The remarkable rally has been significantly driven by the robust performance of UK banking stocks. Analysts note that these financial institutions have even managed to outperform the famed US 'Magnificent Seven' tech stocks over the last two years.
Chancellor Rachel Reeves was quick to attribute the market success to renewed confidence in the UK economy under the current government. However, critics have countered this claim, pointing out that the majority of FTSE 100 companies generate only a small fraction of their revenue domestically.
They highlight that the more UK-centric FTSE 250 index has not enjoyed the same level of success. Furthermore, commentators question whether the Chancellor would accept blame should the market trend reverse. Notably, City AM columnist Mark Kleinman has predicted the FTSE 100 could fall back below the 10,000 mark by the end of the year.
Weekend News Roundup: Challenges and Headlines
While the main index celebrates, other economic indicators present a mixed picture. A key weekend story revealed a significant slump in hiring within the City of London's financial sector, suggesting underlying caution.
In a major international development, Federal Reserve Chair Jerome Powell is reportedly under investigation, sending ripples through global financial circles.
Other top stories from the weekend include:
- The UK business community pushing back against proposals for closer ties with the European Union.
- A BDO report indicating business confidence has hit its lowest point in nearly five years.
- Manufacturers issuing a stark warning that the UK is approaching a 'tipping point' on competitiveness.
- Data showing London homeowners are the most likely in the country to sell their property at a loss.
- A sharp plummet in migrant visa applications, presenting an early test for Chancellor Reeves's policies.
- Analysis suggesting Lloyds Banking Group shares are set to offer the best cash-back rate in Europe.
Looking Ahead
The juxtaposition of the FTSE 100's record high against a backdrop of falling City recruitment and a potential crisis at the US Federal Reserve creates a complex outlook for investors. The market's resilience will be tested as these competing narratives unfold throughout the year.
