FTSE 100 to 10,577 by December 9: the gilt-relief case

The FTSE 100 reaches 10,577 by December 9, 2026 in the base case, 10,807 in the bull case and 10,232 in the bear case. Reuters put the October 2 cash close at 10,461.95, down 2.2% on the week, with the 10-year gilt yield at 5.3624%.

The horizon is by December 9, 2026, the second day of the Federal Open Market Committee (FOMC) meeting that carries a Summary of Economic Projections (SEP). The base case is half of that weekly loss.

Key Levels:

• FTSE 100: 10,461.95 — October 2, 2026 close, Reuters; 33.68 points above 10,428.27, AJ Bell
• Base case target: 10,577 by December 9, 2026 — half of a 2.2% increment, 115.08 points
• Bull case target: 10,807 — one and a half increments if the 10-year gilt stays below 5.50%
• Bear case target: 10,232 — one further 2.2% increment if the November 5 Monetary Policy Committee (MPC) hikes
• Major support: 10,428.27 — October 1 close, AJ Bell and Hargreaves Lansdown
• Major resistance: 10,807 — the bull band from this increment method
• Invalidation level: weekly close below 10,117 — one and a half increments under the October 2 close

How the 10,577 base case is built

The spot is the October 2 cash close, not the October 5 session already open at 09:14 BST. One increment is 2.2% of 10,461.95, or 230.16 points. Half of that, 115.08 points, rounds to 10,577. One and a half increments give 10,807 above the close and 10,117 below it. A week of 2.15% or 2.25%, rather than Reuters' rounded 2.2%, would shift each target by roughly five to 25 points. Dates are the Federal Reserve calendar, the Bank of England (BOE) MPC calendar and the September 17 minutes. August Consumer Prices Index (CPI) is the Office for National Statistics (ONS) print.

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What the cash close, the gilt and the inflation print show

The FTSE 100 base case of 10,577 by December 9, 2026 is half of one weekly-loss increment added back to the last completed cash close. Reuters reported that the index finished October 2 at 10,461.95 and fell 2.2% over the week, its steepest weekly drop since April. One increment is 2.2% of that close, or 230.16 points. Half of that increment is 115.08 points, and 10,461.95 plus 115.08 is 10,577.03, which this note rounds to 10,577. The bull case adds one and a half increments, to 10,807. The bear case subtracts one full increment, to 10,232. The arithmetic uses only the October 2 cash close and the weekly percentage Reuters published. It does not import an outside price target. A weekly close below 10,117, one and a half increments under the same close, is the level that kills the higher base case.

Sources: Reuters and AJ Bell, October 1–2, 2026; Hargreaves Lansdown, October 1; ONS CPI, September 16, 2026; BOE minutes, September 17, 2026; FOMC statement, September 16, 2026.

"There's been a ripple of relief on financial markets as hopes rise that the Fed won't have to go so hard and fast in raising interest rates. Treasury and gilt yields have eased off, and equity markets are on a rising tide, as the rush of worry has started to recede."

— Susannah Streeter, chief investment strategist, Wealth Club (AJ Bell, October 2, 2026)

Why a half-retracement into December 9 is the working case

The mechanism behind 10,577 is a partial gilt relief, not a full unwind of last week's loss. On October 2 the 10-year gilt yield fell 4.09 basis points to 5.3624%, Reuters reported, after the yield had reached its highest since 2007 in the previous session. AJ Bell recorded a 10-year yield of 5.40% at the October 1 equity close, after an intraday move above 5.50%, and a 30-year yield that topped 6% for the first time since 1998 before ending that session at 5.97%. AJ Bell also noted that 5.40% sat well above a 3.3% dividend yield cited for the FTSE 100 for 2026. Friday's bounce of 33.68 points, to 10,461.95, retraced only a slice of Thursday's 177.73-point fall to 10,428.27. The base case takes the index about 1.1% above that Friday close by the December 9 decision, and stops there because Bank Rate is still 3.75% and August CPI was 3.1%.

The September 16 statement raised the funds rate 25 basis points, to 3.75% to 4%. AJ Bell reported payrolls of 29,000 against a 90,000 consensus, and an 80% chance of no October change. The MPC held Bank Rate at 3.75% on September 17, six votes to three. Brent at $100.50 was $5.50 under the $106 level behind the minutes' fourth-quarter CPI path of around 3.75%. See the gilt note into the Budget and the Treasury-yield path into late October. A November 5 hike would make Friday a pause.

Where a one-week percentage band fails

A 2.2% week cannot price a gap in the term premium. The minutes said long-gilt term premia had risen an estimated 200 basis points since February 2022, only about 20 to 30 of them from quantitative tightening itself. The policy gilt stock is meant to reach zero at £46 billion a year through 2034. A repeat of October 1, when 6% traded for the first time since 1998, can hit 10,232 faster than another ordinary week. That is why 10,117 sits underneath.

"In my view, real financial conditions are insufficiently tight. The appropriate response therefore is not to rely on risk premia to do the work of policy, but to reduce inflation risk and policy uncertainty through a clearly communicated reaction function and a sufficiently restrictive path for Bank Rate."

— Catherine L. Mann, member of the Monetary Policy Committee, Bank of England, as reported from her speech (AJ Bell, October 1, 2026)

What would invalidate this call

The base case to 10,577 breaks if any one of these four prints arrives.

• A weekly FTSE 100 close below 10,117. That is one and a half increments under 10,461.95. The higher targets die. The direction is below.
• A 10-year gilt close above 5.50%. October 1 breached it intraday, before Friday's 5.3624%. A finished session back through 5.50% restores the gap behind the 177.73-point drop.
• A Bank Rate rise on November 5, 2026. The BOE calendar sets that day, with the Monetary Policy Report. A hike confirms the three votes for 4% and ends the Friday relief.
• Brent above $106 before December 9. That is the September 14 close in the minutes, $5.50 above October 2's $100.50.

The bull case still needs the gilt under 5.50% and a December 9 SEP that leaves the 3.75% to 4% range in place. Otherwise 10,232 is the downside path.

What to watch into December 9

The UK services Purchasing Managers' Index (PMI) is due at 09:30 BST on October 5 and the ISM services index at 15:00 BST, on AJ Bell's diary. September CPI follows on October 21, the FOMC on October 27–28, and the Budget on October 28. The MPC announces on November 5, with a Monetary Policy Report, and on December 17. This call is dated by the SEP release on December 9. The levels that matter are 10,428.27 and 10,117. Sterling at $1.3233, from $1.3204, is only a cross-check, as is the sterling cross on the hike votes on the Market News desk.

TL;DR

The FTSE 100 base case is 10,577 by December 9, 2026, when the Federal Reserve publishes its next Summary of Economic Projections. Bull and bear cases are 10,807 and 10,232, from fractions of the 2.2% week on the October 2 close of 10,461.95. Reuters put the 10-year gilt at 5.3624% after a 4.09 basis point drop, and ONS CPI was 3.1% in August. The call fails on a weekly close below 10,117, a November 5 Bank Rate rise, a gilt close above 5.50%, or Brent back above $106.

FAQ

What is the FTSE 100 base-case target by December 9, 2026?

The base case is 10,577. Half of the 2.2% week Reuters reported, applied to the October 2 close of 10,461.95, is 115.08 points, and the sum rounds to 10,577. The bull case is 10,807 and the bear case is 10,232. The horizon is the December 9 FOMC decision, when the SEP is released.

Which print is the spot in this call?

The spot is 10,461.95, the October 2, 2026 cash close. Reuters reported it up 0.32% on the day, and AJ Bell had the same close, 33.68 points above 10,428.27. London was already open on October 5, so no unfinished price is used. The 2.2% week is the increment behind every target in the call.

What level invalidates the higher target?

A weekly cash close below 10,117. That is one and a half increments under 10,461.95, rounded from 10,116.71, and it sits under the October 1 close of 10,428.27. The base case is above the spot, so the invalidation direction is below. Only a weekly close counts, not an intraday stab.

Why is the horizon December 9, 2026, and not the next Bank of England meeting?

The Federal Reserve calendar shows December 8–9, 2026 with a SEP. The decision is released on the second day. October 27–28 is on the same page and has no projections. The BOE lists November 5 and December 17 as UK dates. They are watch-items only. The horizon sentence is by December 9, 2026.

How does Bank Rate at 3.75% limit the bull case?

The MPC held Bank Rate at 3.75% on September 17, six votes to three. August CPI was 3.1%, and the minutes saw fourth-quarter CPI around 3.75% on September 14 energy prices. The 10-year gilt was still 5.3624% on October 2, against a 3.3% dividend yield. That gap is why 10,807 is not the base case.

This article is informational analysis only and is not financial, investment, or trading advice. Foreign-exchange, commodity, and equity markets are highly volatile and can lose substantial value rapidly. Leveraged products carry total-loss risk and may exceed the initial margin posted. Past performance and historical correlations do not guarantee future results. Do your own research and consult a regulated financial adviser before making any investment decision.