Consideration has been drawn to the UK stock market this week – with the FTSE 100 closing at a record-breaking 9,000 factors on Monday. This rally will come as welcome information for UK pension savers and buyers, a lot of whom could have important publicity to the FTSE 100 by way of office and private pension funds. Its latest efficiency marks the quickest climb in years for the index. Lengthy thought-about an underdog, but it has outperformed its American counterpart, the S&P 500, by 13 proportion factors since January.
The upswing is being pushed partly by a surge in large-cap mining shares, as buyers react to President Donald Trump’s proposed tariffs on copper imports, set to take impact on August 1. The announcement despatched copper futures hovering and triggered a pointy rebound in mining shares this month, closely represented within the UK’s blue-chip index.
This isn’t the primary time the FTSE 100 has made headlines in latest weeks. After Trump’s initial tariff turmoil in April, London’s inventory market proved most sturdy at that time too – even making good points when others plummeted.
It is because the index attracts its energy from necessity companies, not high-flyers. When markets wobble, folks nonetheless pay power payments and purchase meals, which helps underpin firm income and dividends.
That stability is a key cause the FTSE 100 has weathered this yr’s global market shocks so resiliently, even turning investor nerves into relative outperformance.
Foreign money additionally performs an important function within the FTSE 100’s efficiency. Jemma Slingo, pensions and funding specialist at Constancy Worldwide, defined that when sterling falls, the index “typically will get a lift” as international earnings all of a sudden develop into price extra when transformed to kilos.
Utilizing the identical logic, Slingo mentioned a weak greenback is usually unhealthy for the FTSE 100. Nonetheless, this has but to play out in 2025. However regardless of its latest success, London’s index is notoriously unloved, that means many shares are going low-cost.
A typical measure of how costly a inventory or market is – the yardstick buyers use – is the value/earnings ratio (P/E ratio), which compares an organization’s share worth with its income.
Put merely, the decrease the P/E, the cheaper the share. For context, the S&P 500 trades on a future P/E of twenty-two.7, Europe at 15.0, whereas the FTSE 100 is available in even decrease at 13.6 – making UK shares appear like relative bargains.
Briefly, the FTSE 100’s historic excessive is a milestone exhibiting that after once more basic, diversified stalwarts can nonetheless ship when world uncertainty is rife.
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DEAL OF THE WEEK
If in case you have at the least 500 Tesco Clubcard points, you’ve bought till Tuesday July 29 to double their worth. To do it, swap £5 or extra of vouchers for a Days Out Reward Accomplice code (legitimate at points of interest resembling The London Eye and numerous theme parks), and Tesco provides you with 1,000 bonus factors. That is price one other £10 in vouchers. Even when you don’t desire a time out, it’s nonetheless price doing – you’ll be spending £5 in factors to get £10 again.
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When a partner or civil accomplice dies, there’s a useful however little-known ISA rule that may increase the surviving accomplice’s tax-free financial savings allowance.
It’s known as the Additional Permitted Subscription (APS), and it helps you to add the total worth of your late accomplice’s ISA holdings to your individual ISA allowance – over and above the common £20,000 yearly restrict.
This implies your ISA allowance for the yr may surge to £30,000, £50,000 and even six figures, relying on the dimensions of your accomplice’s ISA pot.
You don’t have to inherit the ISA property to get this tax perk. You possibly can inherit the allowance, even when these property go to another person. To qualify, you need to have been married or in a civil partnership and residing collectively when your accomplice died.
Claims have to be made inside three years of dying, or 180 days after the property is settled, whichever is later. You should use your APS together with your present ISA supplier or a brand new one.
However not all ISA managers supply APS, so at all times test earlier than making use of. Nonetheless, monetary advisers warn that the APS course of may be gradual and paperwork-heavy, so performing sooner fairly than later is vital.
