The FTSE 100 finished the session higher, closing up 59.65 points at 9,897, a gain of 0.6% that leaves the index edging closer to its record high of 9,930 set in November.
Engineering group Rolls-Royce, up 2.7%, and precious metals producer Endeavour Mining, which rose 2.1%, led the advance, while retailers and housebuilders were among the laggards.
The gains came despite a run of generally downbeat economic data. Retail sales slipped in November and again in early December, while government borrowing last month came in higher than expected.
Friday’s rally builds on strength earlier in the week, after investors welcomed the Bank of England’s decision to cut interest rates on Thursday and looked ahead to further easing in 2026. The market had also moved higher on Wednesday following a larger-than-expected fall in UK inflation.
Danni Hewson, head of financial analysis at AJ Bell, said earlier this week: “There’s now a plausible chance the 10,000 index level could be breached by the end of the year, if we get a bit of a Santa rally.
“There are a number of reasons why falling inflation is a boon for the stock market. It means a less constrained consumer, who can spend more on the goods and services of listed companies. It also means those companies themselves face lower costs, and in theory, that includes lower wage demands too, especially in a slowing labour market. Inflation heading back to target also suggests lower interest rates are on the cards, which would be good for companies with debt on their balance sheet, and for their customers’ spending habits too.
So far this year, the FTSE 100 has climbed by around 21%, marking a very strong performance for the UK’s blue-chip index.
