FTSE 100 hits record high in 2025, boosted by global market trends and Smiths Group breakup

The FTSE 100 has reached another record high this morning, with the index increasing by five per cent since the beginning of 2025.

London's primary index climbed 0.46 per cent this morning before slightly retreating, while the more domestically focused FTSE 250 surged 0.53 per cent as reported by City AM.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, attributed this trend to investors seeking safer havens amidst Wall Street volatility over AI spending and Trump’s tariff plans: "Given the volatility this week on Wall Street as investors fret about the trajectory of AI spend, and the impact of Trump’s tariff plans, there’s been a flight to safer havens, offering more reliable returns, where stocks have been undervalued compared to their US peers."

Earlier this month, the FTSE 100 achieved its first all-time high since last spring, fuelled by investor speculation that the Bank of England would slash interest rates more drastically than anticipated. The index also benefited from a depreciating pound and a commodity boom, which propelled miners and oil companies.

Although the pound has rebounded from the $1.22 low it hit earlier in the month, it remains seven per cent lower against the dollar over the past four months, currently standing at $1.24.

Russ Mould, investment director at AJ Bell, commented on the FTSE 100's recent performance: "The FTSE 100 marked new record highs on Friday morning, taking its cues from solid trading on Wall Street as the recovery from Monday’s DeepSeek related volatility continued."

He noted that "Defence and energy names were among those giving the UK’s flagship index an end-of-week boost."

Today, the most significant boost to the FTSE 100 has come from Smiths Group, whose shares surged over 11 per cent following the announcement that the company is considering a split.

The global engineering firm disclosed plans to offload Smiths Interconnect and separate Smiths Detection through either a demerger or sale, alongside a commitment to a £500m share buyback programme.

Other notable gainers in today's trading include Next, with a two per cent increase, BAE Systems rising by 1.3 per cent, and St James’s Place up by 1.2 per cent.

"Investors will be relieved that the markets have successfully negotiated a week full of major events including a Federal Reserve interest rate meeting and the start of the Magnificent Seven earnings season," Mould commented.

He also pointed out that there's another potential market mover on the horizon: "Later on, there’s one more hurdle to get over this week as core PCE inflation data is released in the US.