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A benign political tide key to further share price rises

Janet Yellen
Janet Yellen of the US Federal Reserve, which has been pushing up interest rates due to a more positive outlook

The FTSE 100 index of share prices hit an all-time high last week, when it briefly surged above the 7,500 mark. Towards the end of the week, the index fell back again as tremors on Wall Street hit stock markets worldwide. But taking a longer-term view, share prices have performed well over the past year. A year ago, the FTSE 100 index was hovering just above the 6,000 mark. So there has been a rise of nearly 25pc in the value of major UK-quoted companies over the past 12 months.

The fall in the value of the pound after the vote for Brexit is frequently cited as one of the reasons that share prices have done well. Many companies quoted on the UK stock market generate a high proportion of their profits overseas. The sterling value of these foreign earnings rises when the pound falls, so sterling and UK share prices often move in opposite directions.

But it is not just in the UK that share values...

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