ROAR OF '24
FTSE sees its best year since 2021, climbing almost 6 per cent through 2024
Investors have faced a year of twists and turns
The FTSE has seen its best year since 2021, climbing almost 6 per cent through 2024.
The UK’s blue-chip index was boosted by a buoyant global stock market that meant pension funds invested across the world soared.
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Japan’s Nikkei and Germany’s Dax market both climbed by 19 per cent while the US Dow Jones index went up by 13 per cent.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “The FTSE 100 wrapped up 2024 on a high note.”
The index hit an all-time high of 8,474 in May then after a few faltering months it ended the year up 5.8 per cent at 8,173.02.
Mr Britzman said: “It was a year of resilience rather than runaway success for the UK’s blue-chip benchmark.”
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Investors faced a year of twists and turns.
Two interest rate cuts offered some relief while a tax-hiking budget from Chancellor Rachel Reeves in the autumn put pressure on many of Britain’s domestic companies.
Despite that the FTSE 100 had its best year since 2021, when it climbed 14.3 per cent after the perils of the pandemic. In 2022 it climbed just 0.9 per cent while in 2023 it rose 3.8 per cent.
Tom Stevenson, investment director at Fidelity International, said: “After the turbulence of 2023, we’ve seen a marked shift towards growth, driven by stabilising inflation and a more positive outlook for interest rates.”
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Dan Coatsworth, investment analyst at AJ Bell, said: “While it may lack the glitz and glamour of the US market, it’s still full of interesting companies offering steady earnings growth. The FTSE 100 provides ballast to an ISA or pension.”
Natwest best as banks soar
Finance stocks were the biggest share winners in 2024, with big banks Natwest and Barclays leading the charge.
Natwest ended the year up 95 per cent, as Barclays rose 81 per cent.
Investment expert Dan Coatsworth said: “For a sector often mired in mis-selling scandals and ever-increasing regulation, Natwest has shown that banks are still capable of doing well.”
Analyst Matt Britzman added: “As we approach 2025, banks look anchored on solid ground.”
Air travel stocks also flew high — with engine maker Rolls Royce rising by 91 per cent.
Bucks Wizz
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Budget euro airline Wizz Air said it will return to growth in 2026 after unveiling a compensation agreement over grounded aircraft.
Around 40 Airbus A320neo planes have been left in hangars while engines are inspected. Wizz Air said it has taken “proactive action to mitigate the financial and operational impact.”
It ordered 50 new Airbus A321neo aircraft in 2025-26, to expand its flight programme by around a fifth. Last month it reported that half-year operating profits had slumped by a third to £289.7 million.
It has secured operational support and a compensation package with US engine-maker Pratt & Whitney to the end of 2026.
London merger revival
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Last year saw a boom in big deals — with the number of City mergers and acquisitions more than double that of 2023.
The UK was the third most popular place to buy firms — behind the US and China — with £148.8 billion worth of deals, London Stock Exchange Group data showed.
UK financial firms were most popular. Nationwide Building Society took over Virgin Money for £2.9 billion.
And Hargreaves Lansdown’s £5.4 billion takeover by private equity group Harp Bidco is expected to complete in early 2025.
Fifty-one per cent of UK businesses targeted involved an overseas buyer. Eight mega deals, each worth £4 billion or more, involving a UK target were announced during 2024 — the highest total since 2021.
The largest was the £12 billion bid for London-based school operator Nord Anglia Education by a US private equity consortium.
Micro biz grow bid
British microbusinesses are hopeful about the future, despite the challenging economic conditions.
Small businesses make up 93 per cent of UK firms and employ 8.6 million people.
A new survey revealed seven out of 10 of them are positive about growing their company over the next two years.
But plans are subdued, with just over a quarter planning only local or regional expansion, according to Zempler Bank, formerly Cashplus.
It’s time to buy
The coming year looks set to be a “buyer’s market,” according to a property expert.
House-hunters will have more negotiating power as sales pick up, according to Rightmove’s Tim Bannister.
But he warned that the ending of a stamp duty discount in the spring could have an effect, amid ongoing economic uncertainty and potential interest rate cuts.
Banking body UK Finance said it expects to see a gradual improvement in mortgage affordability in 2025, helping potential homebuyers.
Card spending by consumers climbed 1.6 per cent in 2024 — but considerably lower than 2023’s 4.1 per cent growth.
Barclays said that it had been due to Brits limiting food and drink buys — and prioritising purchases instead on affordable treats.
Energy bill rise
Nine million households have been advised to send meter readings to their energy supplier as prices rise today.
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The average bill across England, Scotland and Wales will climb 1.2 per cent after Ofgem raised its price cap in response to wholesale prices. A further 3 per cent hike is forecast for April — but experts at Cornwall Insight warned “consumers must brace for continued fluctuations.”
The latest price cap is 10 per cent or £190 lower than a year earlier.
SHARES
- Barclays up 3.40 at 268.15p
- BP up 6.25 at 393.00p
- Centrica up 1.10 at 133.60p
- HSBC up 3.60 at 785.30p
- Lloyds up 0.36 at 54.78p
- M&S down 1.90 at 375.50p
- Natwest up 2.10 at 402.10p
- Royal Mail up 1.20 at 363.80p
- Sainsbury’s up 1.40 at 273.60p
- Shell up 34.00 at 2,476.00p
- Tesco up 2.70 at 368.30p
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