London Markets: FTSE 100 nears pre-pandemic high, while data show strongest U.K. growth in almost a year

The index was testing near-term highs around 7,120 earlier on Friday, and a breakthrough that could “call for the test of the post-pandemic peak at 7,164,” said Neil Wilson, chief market analyst for Markets.com, in a note to clients.

Stocks got a boost globally, as investors shook off news of surging consumer prices in the U.S. on Thursday. U.S. stocks climbed in early trading.

“Perhaps central banks really have convinced the markets that any rise in inflation will be short-lived and will not force them to ramp up rates too rapidly,” said AJ Bell investment director Russ Mould, in a note to clients.

Meanwhile, data showed the U.K. economy surged by 2.3% in April, as less restrictive COVID-19 measures drove higher consumer spending. The data are “further proof that the positive direction of travel is becoming established,” said Richard J. Hunter, head of markets at Interactive Investor, in a note to clients.

Read: COVID-19 Delta variant a growing worry in Europe, warn Spanish and U.K. health officials

The clearing of economic clouds has been beneficial for sterling and the more domestically geared FTSE 250 index
MCX,
+0.62%
— up 0.6% on Friday — Hunter added.

“While the strength of sterling may crimp dome of the further gains for the premier FTSE 100 index, currently up by 9.9% this year, the U.K. is gaining popularity as an investment destination, with its undemanding valuation increasingly enticing overseas institutional buying interest,” he said.

Resource stocks drove gains on Friday as metals prices rose. Shares of miners Rio Tinto
RIO,
+1.61%

RIO,
+0.87%
and Anglo American
AAL,
+1.74%
rose 2% each and Glencore
GLEN,
+2.91%
gained 3%, respectively.

Also higher were shares of drug company AstraZeneca
AZN,
-0.03%

AZN,
+0.69%,
up 1%.