FTSE 100 closes at record highon February 3, 2023 at 5:19 pm

The FTSE 100 stock index has closed at a record high, partly due to a drop in the pound against the dollar, which was higher on strong US jobs data.

The index on the London Stock Exchange has many firms which export overseas.

So a weaker pound helps them, because those goods become cheaper for foreign buyers.

The FTSE 100 has also been rising as concerns about global inflation and interest rates ease.

The stock market closed above 7,900 on Friday, and more than 1% higher. The previous closing high was 7,877.45.

Analysts said the peak was also due to optimism that central banks will slow down recent interest rate increases, making borrowing cheaper.

A slowdown in inflation – the rate at which prices rise – across key global economies was also credited with making the stock market.

AJ Bell markets analyst Russ Mould said: “A lot of the [economic] news seems bad, but markets are saying that was priced in during 2022’s heavy mid-year falls, and the bad news is known.”

He said the case for selling stocks and betting against companies “always looks most compelling at the bottom” of the market.

“There is an old saying that you can have cheap shares and good news, just not both at the same time,” he added.