The FTSE 100 has hit a new closing record after investors “fished for opportunities” outside the US, despite the UK economy shrinking by more than expected in April.
The index of the UK’s leading shares rose 0.23% to close at 8,884 on Thursday, topping a previous high of 8,871.31 on March 3.
Shares have rallied in recent days and that continued on Thursday despite Chancellor Rachel Reeves acknowledging “clearly disappointing” new gross domestic product (GDP) figures.
The Office for National Statistics said GDP fell by 0.3% in April, marking the biggest contraction since October 2023 and worse than the 0.1% decline expected by most economists.
But the FTSE 100’s global footprint, with constituents including mining and energy giants, helped lift it to new heights.
The London index has staged a significant recovery since suffering sharp drops in the days after Donald Trump’s tariff announcements on April 2. It had its worst day of trading since the start of the Covid pandemic, while European, US and Asian indexes also took a battering.
However, most indexes, including the FTSE and the US’s S&P 500, have since recovered their losses as the US has struck new trade deals with countries including the UK and China.
Dan Coatsworth, investment analyst at AJ Bell, said: “The UK stock market has been a star performer this year, delivering more than three times the return as the S&P 500 in the US.
“It’s been ages since the UK trumped the US on the stock market, and 2025 has been the breakthrough year.
“Driving the FTSE 100 this year have been precious metal miners including Fresnillo, defence stocks Babcock, BAE Systems and Rolls-Royce, and financials such as Lloyds and Prudential.
“It’s been an eventful first half of the year, with many investors turning their backs on the US amid concerns about Donald Trump’s trade policies and how they might hurt the economy.
“They’ve fished for opportunities across the pond, with Europe being a magnet thanks to its cheaper markets relative to the US.
“The UK market has done well, but Germany has done even better thanks to the government’s plans to splash the cash on defence and infrastructure.”
