The FTSE 100's rise through 6,000 for the first time in five years sounds like a cause for celebration. But gone are the days when the FTSE was an accurate barometer of the UK economy. If that were the case the FTSE would not be rising sharply because the economy has been sluggish over the past 18 months.

Many of our leading companies operate around the world and make their profits elsewhere. The world economy and oil prices are strong, thus boosting profits of companies like BP. Foreign companies are also busily bidding for British ones, thus underpinning their share prices. The most tangible impact on most people in this country is on their pension fund if they have one. One report today suggests pension funds deficits are at their lowest for three years thanks to the rising FTSE.

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