For the first time in a decade, Britain’s financial sector has lost its status as the largest component of the UK’s prestigious index of blue-chip stocks, giving way to some of the world’s biggest consumer groups.

In the latest shake-up of the FTSE 100, companies including Diageo, Reckitt Benckiser, Unilever and Burberry have risen to become the dominant sector of the benchmark. Newly-merged Paddy Power Betfair also made the cut.

At the end of February, consumer goods companies made up 20.85 per cent of the index’s weightings, compared with financials, with a weighting of 20.61 per cent.

The new make-up of the FTSE has dealt another blow to Britain’s banks which have seen their profitability squeezed, hammered by tough post-crisis regulation, fines for past misdemeanours and economic stagnation.

Membership of the FTSE 100 club is based primarily on market capitalisation. Since the start of the year, the value of the five banks – Barclays, HSBC, Lloyds Banking Group, RBS and Standard Chartered – has fallen by £37.8 billion to £210.3 billion, as of closing market prices on Tuesday.

Demoted

The LSE reviews the constituents of the FTSE 100 and FTSE 250 quarterly and announced the changes at close of trading yesterday evening. The current sector classifications were created in 2006.

Aberdeen Asset Management, which is included in the financial sector, is also responsible for bringing down the weighting. The Scottish fund manager was demoted to the FTSE 250.It was joined by Sports Direct, Hikma Pharmaceuticals and Smiths Group.

The four companies will be replaced by Paddy Power Betfair; Mediclinic International, which owns and operates hospitals; Wm Morrison, the supermarket group; and Informa. – (Copyright The Financial Times Limited 2016)