In a historic moment for the City of London, the UK's premier stock market index, the FTSE 100, smashed through the 10,000-point barrier for the first time ever on Friday, 2nd January 2026.
A Record-Breaking Start to the Year
The blue-chip index, which tracks the 100 largest companies listed on the London Stock Exchange, soared to an intraday high of 10,046 points within the first hour of trading. This marked the first session after the new year break. Although it eased back slightly from that peak, the breach of the major psychological milestone sent a wave of optimism through the financial community.
This achievement follows an exceptionally strong performance in 2025, where the FTSE 100 recorded its best year since 2009, closing up 21.5% at 9,931.38. The rally was notably driven by sectors like precious metal mining, defence, and financial services. Throughout last year, the index repeatedly shot past previous record highs and outperformed major European and US peers, including France's Cac 40 and New York's S&P 500.
Chancellor's Drum Beats Louder
Market analysts were quick to hail the significance of the event. Dan Coatsworth, head of markets at investment platform AJ Bell, described it as a "historic moment" that makes 2026 one of the most significant years for the blue-chip index since its launch in 1984.
He directly linked the surge to the government's recent policy direction, stating: "Breaking through the 10,000 level is the best new year’s present Chancellor Rachel Reeves could want." Coatsworth added that Reeves has been "banging the drum about the merits of investing over parking cash in the bank," and the FTSE 100's performance proves the potential of UK shares and counters the narrative that the market is "stuck in the mud."
Policy Shifts and Investor Sentiment
The milestone comes against a backdrop of deliberate government policy aimed at encouraging public investment. In her November Budget, Chancellor Rachel Reeves announced significant changes to cash ISA rules, set to take effect from April 2027.
The key changes include:
- Reducing the annual cash ISA limit for those under 65 from £20,000 to £12,000.
- Maintaining the £20,000 limit for over-65s.
- Keeping the overall ISA allowance at £20,000, meaning individuals could split savings, for example, £12,000 in a cash ISA and £8,000 in a stocks and shares ISA.
This move is widely seen as an incentive to shift savings from cash into investments. The FTSE's record run is likely to be used as a powerful case study for this strategy. Furthermore, analysts note that investors have been attracted to the stock market due to a combination of global political uncertainty and slow UK economic growth, seeking returns that outpace inflation.
The performance of the FTSE 100 is crucial not just for City traders but for millions of Britons, as it directly impacts the value of pensions and other investment funds held by individuals across the country. Today's breakthrough at 10,000 points, following the breach of the 9,000 level in July last year, signals a renewed confidence in the UK's corporate giants and provides a potent symbol of market resilience.
