Analysts at the bank said a more settled eurozone and improving bank balance sheets will lead to a clamour for UK equities.

A pick-up in mergers and acquisitions spurred by “animalistic” boardroom activity will also help sentiment, the note said.

Yesterday, the FTSE closed at 6,570, meaning the index would have to rise nearly 22% before hitting 8,000.

Shares have never traded above 6,930, reached during the dotcom boom in 1999.

Earlier this month, Old Mutual’s Richard Buxton also predicted the FTSE would hit record highs, although at a more modest level of 7,300.

“In 2014, we anticipate that the trading range may move up to 6,500-7,300 as companies start to invest and their earnings and profitability improve,” he said.

“In other words, we genuinely believe that we are in what might be termed the ‘foothills’ of a significant equity market growth phase.”