UK/FTSE 100: elated, decorrelated and just a bit inflated - Financial Times
Sell in May and go away. That was sage advice in 2018. It has taken five years for the FTSE 100 index to approach the record it hit back then. A strong recent run of outperformance is interwoven with the biggest interest rate rises in a generation. The outlook for the cost of money will help determine whether further highs occur soon. Pundits who wrongly conflate the City benchmark with UK plc will struggle to believe the former can be doing so well. Britain is beset by high inflation and public sector pay strikes. The current government lacks scope for radical action after its shortlived predecessor shook investor confidence with ill-judged spending plans. The reality is that the FTSE 100 is a legacy of times when the UK looked out rather than in, via the British empire, the postwar Pax Americana and finally the EU. This means three-quarters of FTSE 100 revenues originate from overseas. For example, AstraZeneca, the UK's largest pharma group, made less than a tenth of its revenues...