In a historic moment for the London Stock Exchange, the UK's premier share index, the FTSE 100, smashed through the 10,000-point barrier for the first time ever on Friday, 2 January 2026.
The blue-chip index, which tracks the 100 largest companies listed in London, surged to an intraday high of 10,046 points within the first hour of trading. This marked a powerful start to the new year, following the festive break, with the index later easing back slightly from its peak.
A Landmark Achievement for UK Markets
This breakthrough caps off a remarkable period for the FTSE 100. The index closed 2025 at 9,931.38 points, having recorded its best annual performance since 2009 with a gain of 21.5%. Throughout last year, it repeatedly set new record highs and outperformed major European and US rivals like France's Cac 40 and New York's S&P 500.
The previous symbolic threshold of 9,000 points was breached in July 2025, setting the stage for today's monumental leap. Sectors such as precious metal mining, defence, and financial services were notable drivers of the market's strength.
Political and Economic Winds Behind the Rally
Market analysts point to a confluence of factors fuelling investor interest. Global political uncertainty and sluggish UK economic growth have paradoxically made the relative value of UK equities attractive. Furthermore, the government's active encouragement for public investment in stocks appears to be gaining traction.
Dan Coatsworth, head of markets at AJ Bell, hailed the event as a historic moment, stating it "already makes 2026 one of the most significant years for the blue-chip index since its launch in 1984." He added, "Breaking through the 10,000 level is the best new year's present Chancellor Rachel Reeves could want... It also proves to cynics that the UK market is not stuck in the mud."
Policy Push Towards Investment
The Chancellor's recent policy moves are seen as a direct attempt to steer savers towards the stock market. In the November 2025 Budget, Rachel Reeves announced significant changes to cash ISA rules, effective from April 2027.
- For those under 65, the annual cash ISA allowance will be reduced from the current £20,000 to £12,000.
- The overall ISA limit remains at £20,000, meaning savers could place £12,000 in a cash ISA and the remaining £8,000 into a stocks and shares ISA.
- Individuals aged 65 and over will retain the full £20,000 cash ISA allowance.
This shift is designed to incentivise investment in UK shares, a strategy that the FTSE 100's current performance powerfully validates. The index's health is crucial not just for direct investors but for the millions of Britons whose pension pots are invested in the market.
As trading continues, all eyes will be on whether the FTSE 100 can consolidate above its new historic plateau, signalling a renewed confidence in the UK's corporate landscape.
