FTSE 100 nears record high

The FTSE 100 index of leading UK company shares is nearing its record high.

Earlier today, the index reached its 15-year peak at 6,921.32 points, within spitting distance of its all-time high of 6,950.60 points, reached in December 1999.

The index has since slipped back slightly, trading at 6,890.88 as I type this at lunchtime.

What is driving this higher index level for the FTSE 100?

Recently published price inflation figures have prompted speculation that any interest rate rise will be deferred until later in the year, possibly even until next year.

There is even the possibility of an interest rate cut, which could be beneficial for FTSE 100 companies as it would strengthen consumer spending.

Investors also hope that a resolution to the Greek debt situation will be found this week, which is improving market sentiment.

A government official in Greece has confirmed that the country will seek a six-month extension to its European loan later today. This would represent an extension to the loan, rather than a renewal of the bailout agreement.

Closer to home, new unemployment figures in the UK have shown the number of people out of work falling by 97,000 in December to 1.86 million.

This means unemployment now stands at 5.7% of the adult working population, and employment at 31 million is the highest level since records began in 1971.

Assuming no big shocks to the financial system, it is reasonable to expect a new record high for the FTSE 100 in the not too distant future.