FTSE 100 hits record high at 10,052

The FTSE 100’s brief rally above the 10,000 milestone is a powerful signal for UK markets, reflecting ongoing confidence in earnings resilience, attractive valuations and the growing appeal of UK equities to international investors at a time when policy headwinds are beginning to ease. While the index’s recent outperformance may become choppier in 2026, it remains fundamentally supported by globally diversified earnings, strong cash generation and the prospect of a more accommodative Bank of England, suggesting the trend is sustainable even if gains moderate compared to 2025's over 20% advance. Key catalysts for UK equities in 2026 include continued progress on inflation, measured rate cuts and ongoing productivity improvements, while the main risks centre on heightened geopolitical tensions, an unexpected resurgence in inflation, a sharper slowdown in global growth or a breakdown in earnings delivery that could unsettle sentiment.