Will the FTSE run out of steam?

A recent survey of 22 investment banks and other financial services providers produced an average predicted year-end level of 7,015. But a repeat of last year’s stellar performance looks unlikely.

What a start to the new year. Britain's blue-chip index, the FTSE 100, hurtled to a new record high above 7,200 on the first trading day after the holiday. That crowned a 14% jump in 2016, a better showing than any of the major continental indices. It included a near-20% increase since the Brexit vote in late June. Nonetheless, it's interesting to note that the latest record is only marginally above the index's level in late 1999, the dotcom-era peak. "That's hardly stellar growth over a 17-year period", says Iain Dey in The Sunday Times. Thanks to two huge bear markets, the chart of the past 20 years "looks more like the peaks and troughs of a heart-rate monitor".

So what next? "It's a lottery whether stockmarkets go up or down in the short term", as Patrick Connolly of Chase de Vere notes (see below) in The Sunday Times. But that doesn't stop strategists having a go at short-term predictions. This year they have been cautious with their 12-month forecasts on average so cautious, in fact, that the average forecast for December 2017 has already been eclipsed.

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FTSE 100 predictions for Dec 2017
Bank/asset managerDec-17
AJ Bell7,341
Chase de Vere6,900
Charles Stanley7,200
City Index7,030
Credit Suisse7,000
Fidelity7,300
Goldman Sachs7,300
Liontrust7,150
Socit Gnrale7,500
UBS7,100
Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.