Banking stocks soared to their highest levels since the Brexit vote as investors continued to cheer signals the US Federal Reserve was still on track to raise interest rates this year.

London's top tier index ended the day nearly 0.5% higher at 7,302.41, marking its highest level since January 17 - just days after the FTSE 100 set its longest-ever record closing streak.

It was aided by banking stocks including Royal Bank of Scotland Group (RBS), Barclays and Lloyds Banking Group, which rose to levels not seen since before the EU referendum in June.

RBS rose rose 5p to 246p, Barclays rose 4p to 239.25p, and Lloyds Banking Group rose 0.98p to 67.47p.

It comes after Federal Reserve chair Janet Yellen spoke in front of the US Senate Banking Committee on Tuesday and hinted at further interest rate rises in the coming months.

Jasper Lawler, a senior market analyst at London Capital Group said: "She really didn't give too much away but it only takes a small intonation to nudge markets one way or the other.

"Saying it would be 'unwise to wait too long' to hike rates indicates the Fed thinks its on course for the three rate hikes this year."

A hike would help boost bank lending margins after years of ultra-low interest rates.

Investors were also digesting UK data which showed that unemployment fell by 7,000 to just under 1.6 million giving a jobless rate of 4.8%, the lowest level since the start of 2006.

The pound was flat against the US dollar at 1.247, and fell 0.15% against the euro to 1.176.

Across Europe, the French CAC 40 and German Dax rose nearly 0.6% and 0.2%, respectively.

In oil markets, Brent crude prices were flat at to 55.81 US dollars per barrel (£44.69), despite data from the US Energy Information Administration showing a larger-than-expected rise in inventories

In UK stocks, equipment rental firm Ashtead shot to the top of the FTSE 100 after Merrill Lynch increased its price target for the stock from 1,620p to 2,000p, saying potential corporation tax cuts in the US would benefit the firm.

It pushed Ashtead Group shares up 42p to 1,708p.

Stagecoach Group shares rose 2.6p to 215.9p after announcing it had sold its stake in a US joint venture that operates sightseeing bus services in New York City.

The train and bus operator said it has offloaded its interest in Twin America to partner City Sights for an undisclosed sum.

The biggest risers on the FTSE 100 were Ashtead Group up 42p to 1,708p, Standard Chartered up 19.1p to 817.9p, Royal Bank of Scotland Group 5p to 246p, and BHP Billiton up 28p to 1,420p.

The biggest fallers were TUI AG down 88p to 1,130p, Capita down 19.5p to 507.5p, Next down 106p to 3,847p, and Dixons Carphone down 8.2p to 304.8p.