Baltic Dry index surges to two-year high on Trump's infrastructure plans as pound spikes above $1.25

The Baltic Dry Index, a measure of commodity shipping costs, has surged to a two-year high on hopes of a spending boom

Baltic Dry Index sails to two-year high

The Baltic Dry Index, which is seen by many as a leading indicator of the state of the world economy, has surged to its highest level in almost two years. The index measures shipping costs for commodities including iron ore, copper and steel. It is comprised of three-sub indexes that measure different sizes of merchant ships, and is based on a daily survey of agents all over the world.

It hit a peak level of 11,793 in May 2008 but since hitting a nadir in February it has rallied by 333pc. The latest surge in the index comes following Donald Trump’s shock victory on November 8. Since then it has soared 50pc to  1,257.

During his campaign trail, Trump pledged to launch a $1 trillion infrastructure package. The spending would be a boon for owners of vessels ferrying iron ore and other commodities around the world, accelerating the Baltic index’s recovery in the past two weeks.