LONDON, April 26 (Xinhua) -- One of the major factors behind a week-long surge of the benchmark FTSE 100 is the expectation of possible interest rate cuts this year, a top economics professor said on Friday.

The FTSE 100 closed on Friday at a new high of 8139.83 points, gaining over 3 percent this week. This represents the index's best weekly performance in 2024.

"There are two or three main things going on with the rise of the index, and the first is the expectation that interest rates, which have risen substantially over the last couple of years, will fall," Iain Begg, a professor from the London School of Economics and Political Science (LSE), told Xinhua in an exclusive interview.

Economists have widely forecast that in the coming months, the Bank of England will cut interest rates from their current level, a 15-year-high of 5.25 percent, as inflation in the United Kingdom (UK) is moving towards the central bank's 2 percent target.

"It's the usual pattern that as interest rates fall, other forms of asset tend to go up, and the stock market is one of those," said Begg.

The second factor contributing to the rise of the index is that there are some signs of an economic recovery in the UK, while the third is that the inflation surge over the past two years has led to a rise in asset prices, said the professor.

"These three things come together and interact to cause the rise," he added.

In terms of the overall economic picture of the country, Begg said the fact that the stock exchange is not being negative about the conditions in the economy suggests that there is a gentle recovery taking place.

However, he said that the UK economy is still bumping along the bottom, neither growing nor declining. "It's a very slow pace of economic growth," he said.

Compared with other indices around the globe, the economist explained: "There was a sense over the last year or two that the FTSE 100 would not keep pace with other indices such as the S&P or the main European ones, the CAC 40 and the DAX. That may well have been corrected. The expectation now is that the big driver in all these stock exchanges will be interest rates."

Global conditions may have depressed stock markets due to fears over geopolitical difficulties, the professor said.

However, energy producers will benefit from the rise in oil prices, which is strongly linked to global conditions, he said. Enditem

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