As I wrote about a number of years ago, obtaining historic pe ratio data for the FTSE 100 is not as easy as it is for the US indices. Therefore I have again had to pull together this information myself. I couldn't believe that the PE ratio was in the high 30s and wanted to know whether this was related to Brexit or existed prior to that.
From the graph below you can see that in January 2016 the FTSE was still on a reasonable PE ratio of 16.69. However this changed rapidly from February 2016. I am guessing that this relates to the asset right offs from the big miners at the start of the year.
You could argue that this one off effects needs to be striped out of the data and hence this is why the FTSE is trading on such a high trailing PE. I don't have access to forward PEs, plus it is hard to know how reasonable the earnings estimates are.
One way around this is to use the cyclically adjusted pe (CAPE) ratio, and the CAPE is at much more reasonable level of 13.2. I am hoping that updated earnings will bring this ratio down to more reasonable levels. However Brexit and the Bank of England's bazooka response seems to have supercharged the issue. Time will tell whether the market will correct or the PE ratio gradually reduces.