Hopes that inflation is abating globally have driven flows into global stocks. But with data and company earnings holding up better than anticipated and a reopening in China boosting commodity stocks, fears that the UK economic outlook would hold London stocks back have eased.

"You get the great big behemoths on the FTSE 100 who pay whopping big dividends and they have the armour to deal with a recession. A lot of these are in defensive positions where they're actually going to do quite well in a recession," Danni Hewson, AJ Bell financial analyst, said.

"Also, the reopening of China will lead to huge demand for commodities, so you're going to see commodity stocks up and that's going to really help UK equities."

The rise in the index on Friday was partly down to a drop in the pound against the dollar, which soared after strong U.S. jobs data.

The index also pushed higher on Thursday after the Bank of England raised rates for the tenth consecutive time since late 2021, and to their highest since 2008, but signalled it's nearing the end of its tightening cycle. The Federal Reserve also hiked the bank rate this week and indicated U.S. rates may have further to increase.    The FTSE 100 rose to 7,906.58 at 1545 GMT, surpassing a previous record high of 7,903.50 hit on May 22 2018. A near-1% drop in the value of the pound against the dollar helped boost the exporter-heavy FTSE 100.

The index was last up 1% on the day at 7,900.58 and has rallied 4.9% so far this year. Europe's broad STOXX index is trading near its highest level since last April.     London's stock index has risen in recent months in line with a global rally in equities as inflation pressures abate, as well as gains in commodity focused stocks.

The FTSE 100 is up around 21% from roughly 1-1/2 year lows hit in October.

"Of course, there is still a risk this lift in spirits may be short-lived," Susannah Streeter,

"Britain might have avoided dipping into a recession in 2022, but one is still forecast to the economy this year, with the IMF warning that the UK will be the laggard among the G7."

(Reporting by Lucy Raitano; Editing by Amanda Cooper)

By Lucy Raitano and Samuel Indyk