Lindsay James, investment strategist at Quilter Investors, said: “With economic growth still lagging for many of its G7 peers, the UK has turned this to its strength in the fight against inflation, which last month fell below that of the US and saw Bank of England Governor Andrew Bailey announce that this data shows the UK is ‘pretty much on track’ with the central bank’s forecasts.”

She said it has resulted in investors anticipating a cut to the UK base rate before interest rates are reduced in the US.

This has helped the pound weaken against the US dollar.

There are many large international companies in the FTSE 100 whose earnings are generated in dollars but reported in pounds.

It means they become more profitable when the dollar strengthens.

Russ Mould, investment director at AJ Bell, said today’s “positive showing” is “exactly what’s needed to help repair the reputation” of the UK stock market.

He added: “It’s going to be a slow process but every little helps.

“The UK has lived in the shadows of the US stock market for the past decade or more, delivering inferior returns on a relative basis as it has lacked the go-go growth stocks highly desired by investors.

“The FTSE’s low exposure to the technology sector has diminished the index’s appeal and seen investors look elsewhere for ways to turbocharge their portfolio.

“Brexit and political uncertainty have also weighed on the index, even though approximately three quarters of its constituents earn money overseas. That’s led to cheap valuations and a mountain of unloved stocks.

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