FTSE 100 hits a new record closing price

The index ended on Monday at 8,023.87 points to mark the new record, surpassing its earlier high of 8,012.53 reached in February last year

The FTSE 100 stock index of the UK's biggest publicly-listed companies has hit a new record closing price.

The fresh all-time high was led by a weaker pound and easing tensions in the Middle East.

The index ended on Monday at 8,023.87 points to mark the new record, surpassing its earlier high of 8,012.53 reached in February last year.

It was 1.62% higher at its close, with retailers M&S, Tesco, Sainsbury's and Ocado among the big risers of the day.

Shares have benefitted from a weaker pound because the index on the London Stock Exchange has companies with footprints overseas.

A weak pound makes goods they export cheaper for overseas buyers and helps inflate the value of business done elsewhere.

Rachel Winter, wealth manager at Killik & Co, said: The FTSE contains a large number of international companies that earn their revenue in dollars and report their profits in sterling.

The strength of the dollar is due to sticky inflation in the US, which means that US interest rates will remain higher for longer, she added.

The pound was 0.2% lower at $1.234 as a result, representing sterling's lowest point against the US currency for nearly five months.

Axel Rudolph, senior market analyst at IG, said the "de-escalation in the Middle East" also played its part to propel the FTSE 100 to its new record.

The index has been steadily rising in recent weeks on hopes the BoE will reduce interest rates as inflation drops steadily to the central bank's 2% target rate.

By making borrowing less expensive, lower interest rates discourage saving and can increase borrowing for home purchases and business investments, helping to breathe life back into the economy.