The UK Economy - Share Prices

The vast majority of companies in the UK are privately owned and the shareholders do not trade their shares on a quoted stock exchange. However, the share of many of the UK’s largest firms (and many international firms too) are traded on the London Stock Exchange. The prices of shares in individual firms move up and down throughout he trading period, as does the FTSE-100 index - a statistic which is often quoted in the media as representing how the overall stock market performed from day to day…

The FTSE 100 Index — also called FTSE 100, FTSE, or, informally, the ‘footsie’ is a weighted index of the 100 most valuable UK companies (as measured by their total market capitalisation) listed on the London Stock Exchange. Market capitalisation is calculated as share price x number of shares in issue. The index began on 3 January 1984 with a base level of 1000; the highest value reached to date is just short of 6950 in December 1999. As you can see below, the FTSE-100 fell dramatically during the financial crisis of 2007-2010 to a low of below 3,500. It has since recovered as investors have seen firms increase their profits and restore their balance sheets. Will it rise further, or are we about to enter another period of share price weakness as the global economy struggles to sustain its recovery during 2011?

The month-end value of the FTSE-100 index is represented in the following live chart.

Data from Timetric.

To view this graph, please install Adobe Flash Player.

Bank of England Target 2.0 from Timetric