FTSE 100 Climbs: Analyst Sees Further Record Highs This Year

The FTSE 100 closed at 10,369.75 on Friday, up around 4.4% since the start of the year, as investors assessed the index’s prospects for the rest of the year.

AJ Bell expects the benchmark to push toward 10,750 by the end of 2026, supported by profit momentum, income generation and sustained buyback activity.

The broker's investment director, Russ Mould, said in a December note that investors are now questioning whether the FTSE 100 can build on its recent strength.

He stated that analysts anticipate “14% profit growth from the FTSE in 2026,” alongside higher dividends and an ongoing “share buyback bonanza.”

Consensus forecasts cited by AJ Bell point to FTSE 100 pre-tax profits reaching £260 billion in 2026, with dividends expected to hit a record £85.6 billion.

While that implies a forward yield of about 3.4%, Mould said total cash returns remain competitive when including buybacks.

M&A activity has also added support, although dealmaking has moderated as valuations have risen. Mould noted that buyers “have put in bids for UK-listed companies worth £29 billion” in 2025, and additional activity could “top up the pot for investors” in the coming year.

He warned that higher valuations and global growth risks remain key variables, but said strong operational performance from financials, oils and miners, which together account for more than half of expected FTSE 100 earnings, “can only be good news” for the index’s trajectory.