The FTSE 100 closed 20.46 points higher at 7,885.17 after hitting a new record high, suggesting that investors still have confidence in the UK’s economic outlook.

It peaked at 7,934.3 points in intra-day trade to pass the previous peak it reached on Friday and is now closing in on the 8,000 threshold.

A more positive mood emerged after the National Institute of Economic and Social Research forecast that the UK will narrowly avoid recession.

Investors also welcomed less hawkish comments from US Federal Reserve chair Jerome Powell overnight.

In equity markets, Frasers Group leaped to the top of the blue chip index after saying said it was no longer going ahead with its acquisition of the Rascal Clothing brand from JD Sports and confirming completion of the purchase of five of the remaining seven premium fashion brands – Cricket, Tessuti, Scotts, Giulio and Choice. JD Sports also gained.

BP was ahead for the second day in a row after posting record profits on Tuesday. The stock was 16.8p higher at 533.2p at the end of the session, boosted after Barclays hiked its price target on the shares to 1,000p from 700p.

Housebuilder Barratt Developments advanced after it posted a rise in interim profits but said net reservations in January had fallen 45% and cut its dividend as buyers held back amid rising interest rates. Shares were 7.8p higher at 467.9p at the close. Full story here

Transport operator FirstGroup gained after saying it had agreed to buy buy Essex-based bus group Ensignbus for an undisclosed sum

It said it would provide growth opportunities in the B2B and bus vehicle dealership markets and enhance the group’s local commercial bus operations in Essex.

In addition to its commercial operations, Ensignbus has a vehicle refurbishment and re-sale business that purchases used vehicles and refurbishes to modern standards before re-selling.

Global markets

Wall Street enjoyed a strong session as investors shook off “slightly” hawkish remarks from the head of the US Federal Reserve.

Fed chairman Jerome Powell, speaking at The Economic Club of Washington, reasserted that the US central bank will need to keep raising interest rates.

“We think that we’ll need to do further rate increases and we think we will need to hold policy at a restricted level for some time,” he said.

But one analyst described his comments as a “damp squib” and the Dow Jones Industrial Average ended up 0.8%, the S&P 500 up 1.3%, and the Nasdaq Composite up 1.9%.