The FTSE 100 closed December 24 at 9,889.22. Today, December 29, 2025, the index is trading at 9,866.53. The mathematics of 10,000 are no longer speculative; they are a function of the Bank of England’s December 17 pivot and a late-cycle surge in heavyweight financial and energy constituents. The market is not merely approaching a psychological level. It is pricing in a 3.75% base rate and a 3.2% inflation floor that has fundamentally re-rated UK equities.
The Monetary Impulse of December 17
The Monetary Policy Committee (MPC) delivered a 25-basis point cut on December 17, 2025. The 5-4 vote to lower the Bank Rate to 3.75% signaled the end of the ‘Table Mountain’ plateau. Per the December 2025 Monetary Policy Summary, the MPC now views the 3.2% CPI print as a manageable deviation from the 2% target, especially as services inflation eased to 4.4% in November. This policy easing has triggered a capital rotation. Investors are fleeing the 4.1% yields of 10-year Gilts for the 3.41% dividend yield of the FTSE 100, which offers superior inflation-adjusted total return potential through 2026.
Sector Drivers and Ticker Realities
Financials and Energy dominate the current tape. HSBC (HSBA.L) and Barclays (BARC.L) have seen their net interest margins stabilize as the BoE terminal rate becomes clearer. Simultaneously, Shell (SHEL.L) and BP (BP.L) remain buoyant as Brent crude holds a 20-day moving average of $82.14. This dual support from both high-yield value and cyclical growth is rare. The index is no longer a ‘dinosaur’ benchmark. It has become a yield-capture vehicle for global institutional desks looking for a hedge against the volatility seen in the S&P 500’s tech-heavy concentration.
The Technical Barrier at 9,950
Price action on December 23 peaked at 9,901.48 before a minor pullback. The 9,950 level represents the final technical outpost before the five-digit milestone. Analysis of the London Stock Exchange order book reveals heavy sell-side pressure clustered between 9,940 and 9,965. This is not sentiment; it is automated profit-taking. However, the 12-month gain of 21.14% suggests that short-term volatility is being absorbed by high-volume institutional accumulation. Trading volume on December 19 hit 1.61 billion shares, a level of liquidity typically reserved for major market shifts.
Dividend Dynamics and January Inflows
Income-seeking investors are tracking the upcoming January dividend schedule. GSK (GSK.L) is confirmed to pay 16p per share on January 8, while Next (NXT.L) and Marks & Spencer (MKS.L) have signaled robust cash positions following the Christmas trading period. Per the latest Office for National Statistics inflation data, the real yield on these equities is widening as the CPI headline rate trends toward the OBR forecast of 2.2% for late 2026. This yield gap is the engine driving the index upward.
| Indicator | Value (Dec 29, 2025) | Trend |
|---|---|---|
| FTSE 100 Price | 9,866.53 | Bullish |
| BoE Base Rate | 3.75% | Falling |
| UK CPI (Nov) | 3.2% | Cooling |
| Index Dividend Yield | 3.41% | Steady |
The immediate risk is a ‘double top’ at 9,950, but the fundamentals argue otherwise. With the UK GDP growth rate confirmed at 1.3% in Q3, the recessionary fears that plagued 2024 have evaporated. The market is now a battleground between technical resistance and the structural reality of lower interest rates. The next data point of consequence is the January 15, 2026, CPI report. A print below 3.0% will be the catalyst that finally forces the FTSE 100 through the 10,000 ceiling.
