The UK has missed out on a global stock market rally so far in 2023 as the Bank of England’s scramble to raise interest rates and falling oil prices hold back the FTSE 100.

London’s main benchmark has lagged well behind other big developed market indices, gaining less than 1 per cent from the level at which it finished 2022 by Wednesday’s close, having fallen 1.7 per cent this quarter. The latest setback for a market that has long been out of favour with investors at home and abroad has dashed hopes that last year’s relative resilience heralded the start of a longer period of catch-up for the FTSE.

Rich in oil majors and other cash-generative value stocks but lacking large technology groups able to benefit from the recent hype around artificial intelligence, the UK makes for a relatively hard sell, analysts say. Meanwhile, relatively turbulent politics and uniquely stubborn inflation act as further deterrents to international investors.