FTSE 100 hit a new record high as trading opened in London

After Jerome Powell, the chairman of the US Federal Reserve, indicated that the pace at which interest rates rise might slow down in the new year, the FTSE 100 hit a new record as trading opened in London.

The blue chip index rose 0.7 per cent to 7,925.02, an intraday record after it had reached 7,906.58 Friday. Market sentiment was lifted by Powell’s dismissal of strong labour market figures Friday.

Analysts had predicted that the US economy would create 517,000 jobs in January. This raises concerns about rate increases threatening markets.

The Fed Chairman acknowledged in a much-anticipated speech Tuesday that interest rates may need to rise if economic conditions remain strong.

He said that 2023 should see a “significant decline in inflation”. This would help to rally Wall Street’s main indexes in the hope that interest rates will not rise more aggressively.

The FTSE 250 has risen by 0.7pc, to 20,324.41.

8:29 AM: After hitting a record-breaking high in trading this morning, the FTSE 100 has slightly retreated after sharp gains on Wall Street yesterday after comments by US Federal Reserve Chair Jerome Powell that renewed hope for a less aggressive monetary policy.
The index is heavy on exporters rose 0.8 per cent to an all-time high at 7,925.02, exceeding its previous peak of 7,906.58 last week.

Since then, the FTSE 100 index has risen to 7,904.36, an increase of 0.5pc over the previous day. The FTSE 250 midcap index has climbed 0.7pc.

Wall Street’s major indexes rose on Tuesday as Powell stated that 2023 should see “significant falls in inflation”. However, he also acknowledged that rates could need to rise if there is economic strength.

Barratt Developments gained 1.6% despite the fact that Britain’s biggest housebuilder reduced its half-yearly dividend.

After reporting a 54pc decrease in half-yearly profit before taxes, Ashmore Group, an emerging markets-focused asset manager, saw its share of profits rise 0.4pc.

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