The UK’s benchmark FTSE 100 index has smashed through the 10,000-point barrier for the first time, capping off a remarkable year for the London stock market. The blue-chip index jumped to a record high of 10,046 on the first trading day of 2026, marking a 21.5% surge over the past 12 months.
The milestone achievement underscores the resilience and strength of the British economy, with Chancellor Rachel Reeves hailing it as “a vote of confidence” in the country’s financial prospects. Leading the charge were industrial giants Rolls-Royce and luxury fashion house Burberry, which saw their share prices rise by around 4% on the day.
“Breaking through the 10,000 level is the best new year’s present Rachel Reeves could want,” said Dan Coatsworth, head of markets at stockbroker AJ Bell. “It proves to cynics that the UK market is not stuck in the mud, and that the US stock market is not the only place to make money.”
The FTSE 100’s stellar performance mirrored the broader upward trend in global markets over the past year, fueled by factors such as the artificial intelligence boom and easing trade war tensions. Investors have also been buoyed by the prospect of interest rate cuts from central banks, which have provided a supportive economic backdrop.
While the index took a brief dip last April following the announcement of steep US tariffs, shares soon recovered as trade frictions began to ease. This uncertainty is thought to have encouraged some investors to diversify away from the US and into cheaper markets like the UK during 2025.
The FTSE 100 is home to the 100 most valuable companies listed on the London Stock Exchange, with a diverse range of sectors represented – from mining and energy to pharmaceuticals and consumer goods. Defence stocks in particular have had a standout year, with Babcock and Rolls-Royce more than doubling in value since the start of 2025.
Looking ahead, Wall Street analysts predict that global markets will continue to rise in 2026, despite concerns over potential bubbles in the AI sector. UK retail investors remain optimistic, with a recent poll by eToro finding that 53% are confident the current bull market will persist throughout the year.
