The FTSE 100 Index set new records today as signs that US interest rates will rise at a slower than expected pace resulted in further gains after a Budget-inspired rally in the previous session.

 

London's top-flight reached a new all-time intraday high of 6982.8 and though some of the fizz came out of its performance later it still closed 17.1 points up at 6962.3, just above its previous best finish earlier this month.

The value of the leading share index had risen by 1.6% on Wednesday as it enjoyed its strongest session since January.

It came after Chancellor George Osborne had confirmed tax breaks for the beleaguered North Sea energy industry as well as announcing help for first-time buyers, in a boost for house builders.

The buoyant performance fuelled expectations that the FTSE 100 will soon surge through the 7,000 mark.

Blue-chip shares built on the Budget cheer today after the US Federal Reserve cooled expectations over higher interest rates by highlighting the impact of the strong dollar on exporters.

But this failed to ease pressure on the pound against the greenback after figures this week showed stalling wage growth and Bank of England minutes signalled caution over low inflation.

Sterling was driven down further following remarks by Bank chief economist Andy Haldane - speaking in a personal capacity - that the next move in interest rates is as likely to be a cut as a rise.

The pound plunged by two cents close to 1.47 US dollars although it was stronger against the euro, lifting a cent to just under 1.39. The single currency has been driven lower amid the European Central Bank's major asset purchase policy.

On Wall Street, the Dow Jones Industrial Average headed lower after it gave up Fed inspired gains from the previous session as oil prices fell. Germany's Dax also fell after recent gains while France's Cac 40 was flat.

In London, retailer Next provided the main interest in the corporate arena after it downgraded its forecasts for sales growth this year.

It reported a 12% rise in annual profits but remains cautious about prospects and has pencilled in sales growth of between 1.5% and 5.5% in the current year, compared with the range of 2.5% and 7.5% forecast in December.

Next's record of containing investor expectations is well known in the City, but shares still slumped by 4% or 305p to 7315p.

There was also a results day retreat for Ted Baker as investors locked in profits following a strong recent run for shares in the fashion label.

Revenues were 20% higher at £387.6 million and pre-tax profits lifted 25% to £48.8 million as founder and chief executive Ray Kelvin hailed "another excellent year" for the business, which has 398 stores and concessions.

However, shares in the FTSE 250 firm were 2.5% lower - off 71p to 2746p - even though analysts at Jefferies retained their buy rating and said the investment case remains "compelling".

The biggest risers on the FTSE 100 Index were Fresnillo up 35p to 679p, Randgold Resources up 151p to 4826p, Marks & Spencer up 16p to 531.5p and Tullow Oil up 6.8p to 309.6p.

The biggest fallers on the FTSE 100 Index were Next down 305p to 7315p, British American Tobacco down 128p to 3668p, TUI down 27p to 1181p and Anglo American down 23.5p to 1046p.