FTSE 100 pushes to record high despite rising inflation

The FTSE 100 managed to snatch a record close on Wednesday even as UK inflation came in hotter than expected. The index rose 1.3%, its strongest daily performance since May, coming to a close at 9,300 as the RSI skimmed the overbought line. The daily chart shows how the 20-day SMA has been offering some short-term support, and the setup remains supportive of further upside in the future. For now, 9,300 emerges as the next resistance to beat as the sellers attempt to take over on Thursday morning.

FTSE 100 daily chart

(Past performance is not a reliable indicator of future results)

July’s inflation reading rose to 3.8%, exceeding forecasts and dampening hopes of imminent interest rate cuts from the Bank of England. Normally, such a print would weigh on equities, particularly rate-sensitive sectors like housing. Yet the FTSE 100 shrugged off the pressure, underscoring the resilience of London’s blue-chip index and its heavy weighting toward internationally exposed companies.

Consumer and healthcare stocks provided the strongest support, reinforcing investor appetite for defensives amid macro uncertainty. Homebuilders slumped on concerns about mortgage affordability in a higher-for-longer rate environment, while energy and mining names struggled after operational setbacks, including flooding that disrupted BP’s refinery activity. Defence stocks also slipped, pressured by optimism around potential progress in peace talks on Ukraine.

While London equities rallied, the mood was more cautious abroad. Wall Street’s tech-heavy indices retreated ahead of the Jackson Hole Federal Reserve symposium, where investors await further clarity on the US rate path. The FTSE 100’s gains contrasted with this global hesitation, highlighting its relative appeal to investors seeking diversification and exposure to commodity, consumer, and healthcare names.