UK's FTSE 100 hits record closing high

The blue-chip FTSE 100 index surpassed the 8,300 mark to reach a record peak of 8,335.68 points and closed 1.2% higher

The UK's FTSE 100 notched a record closing peak on Tuesday in a broad rally as traders returned from a long weekend to price in more interest rate cuts from the Bank of England ahead of its policy meeting later in the week.

The blue-chip FTSE 100 index surpassed the 8,300 mark to reach a record peak of 8,335.68 points and closed 1.2% higher. It was the 11th time the index has closed higher in the past 14 sessions.

The exporter-heavy FTSE 100 stocks also got a boost from a softer sterling, as investors priced in two BoE rate cuts this year, with the first likely in August.

Traders expect the BoE to keep interest rates unchanged on Thursday.

There are still clear risks to the UK equity, according to AJ Bell, investment director Russ Mould.

There is a general election coming up and a change of government is possible; the nation is heavily indebted; and the BoE looks a bit trapped between a low-growth rock and a sticky-inflation hard place, he said.

Adding to Tuesday's upbeat mood, a survey showed British construction companies enjoyed their fastest expansion in more than a year last month.

The mid-cap FTSE 250 added 1.2% to close at its highest in more than a year.

BP slid 1.3% after the oil giant missed forecasts for first-quarter earnings as lower energy prices and a U.S. refinery outage offset higher oil and gas production.

Shell added 1.3% after report the energy giant is in talks with Saudi Aramco to sell its gas station business in Malaysia and a deal could be worth up to $1 billion.