The FTSE broke through the 7,000 barrier, reaching 7,076, close to its highest ever level.

Sterling, meanwhile, hit a new 31-year low against the dollar falling to $1.28.

The FTSE reached its highest ever intra-day level of 7,122 in April 2015. The lowest point for the index this year was on 11 February, when it closed at 5,537.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “So far this year the FTSE 100 has been lifted by rising commodity prices, a weakening pound and looser monetary policy. The UK stock market as a whole has been one of the main beneficiaries of Brexit, through some stocks and sectors have still suffered significantly since the referendum result was announced.

“The reality is the biggest stocks in the index dominate its performance, and the likes of HSBC, Royal Dutch Shell, and British American Tobacco all have international earnings which are now worth more in pounds and pence thanks to sterling’s decline.”

Despite the FTSE 100 reaching near-historic highs, UK stocks are not looking overly expensive.

“The valuation of the UK market is not excessive and investors still look to shares for income, growth and stability,” said Tom Stevenson director of personal investing for Fidelity International.

“It’s difficult to predict the best time to be in and out of the market, especially as the best and worst days very often tend to be bunched together during periods of heightened volatility. It’s far more sensible to stay fully invested through market cycles as missing even a handful of the best days in the market can seriously compromise your long-term returns.”

According to Fidelity analysis, an investor who invested £1,000 in the FTSE All Share index 30 years ago but missed the best 10 days in the market since then would have achieved an annualised return of 6.93% and ended up with a total investment of £7,484.11. That compares with an annualised return of 9.22% and investments worth £14,116.61 if they had stayed in the market the whole time – an opportunity loss of £6,632.50.