The UK's blue-chip FTSE 100 hit an all-time high on Friday, supported by a weaker pound after much softer than expected retail sales data boosted expectations of an interest rate cut next month. The FTSE 100 rose 1.

Retail sales volumes fell by 0.3% in December, figures from the Office for National Statistics showed today. Falls in supermarkets were partly offset by a rise in non-food stores, such as clothing retailers,

News of the record ends a good day for markets in which much of the turbulence of the last 10 days has been reversed. It will be welcome news for Chancellor Rachel Reeves and the government, whose borrowing costs had risen sharply.

London stocks advanced on Friday as the pound fell following a retail sales reading that boosted expectations of a Bank of England interest rate cut next month, with the blue-chip FTSE 100 hitting all-time highs.

The lacklustre performance of the UK economy continued in November after figures today showed GDP edged up 0.1% in the month. The estimate by the Office for National Statistics compared with the City consensus of 0.

The FTSE 100 has hit a new all-time high this morning, surpassing the previous peaks it received in the spring.

UK stocks make a comeback, as BoE rate cut bets soar.

The FTSE 100 index fell 0.3% last night and is forecast to open today’s session flat at 8201. The pound is just below $1.22 ahead of the release of today’s monthly inflation figure.

The new all-time closing high came on the back of a weaker pound, which was trading at $1.22 against the dollar, and expectations of further interest rate cuts.

FTSE 100 surged around 1% to hit a record high of 8,480.57 points as inflation drop sparks hopes of Bank of England rate cuts.

Explore the recent performance of the FTSE 100 index and whether it can jump and hit £10,000 in the near term.