The real economy of the FTSE 100 is, of course, bizarrely disconnected from the UK high street anyway. Most of these mega-cap companies earn their crust in dollars and sell their goods everywhere from Shenzhen to Sao Paulo. A weaker pound, which we’ve had lately, flatters their earnings when translated back into sterling. So the index rising actually reflects more on currency mechanics and global energy prices than it does on the health of British industry. The real test comes when the ceasefire either holds or breaks. If it holds, we’ll see the rally broaden out to the mid-caps—the FTSE 250, the true barometer of domestic UK business. If it breaks, and Brent crude spikes back above $120, you can kiss goodbye to that Chancellor’s Spring Statement wiggle room. For now, enjoy the green numbers, but keep one hand on the ejector seat button. This feels very much like a bull trap dressed up in a Savile Row suit.
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