The domestically focussed mid-cap index climbed 0.5% to a record close of 23,572.05 points. Watches of Switzerland Group was among the top boosts to the index after it flagged strong demand going into next year.

Homebuilder Bellway PLC rose 1.2% after it said its housing revenue was approaching pre-pandemic levels, and that bookings pointed to healthy demand across the country.

Surveys also showed sporting events and summer holidays prompted a big increase in consumer spending in July, aided by the lifting of COVID-19 restrictions on a steady vaccination program.

Still, analysts questioned whether consumer spending was out of the woods yet, considering a recent rise in COVID-19 cases due to the Delta variant.

"The outlook for travel and leisure stocks is kind of mixed at the moment, with most shares clocking gains but still being off their highs due to rising uncertainties regarding the Delta variant," said Michael Hewson, chief market analyst at CMC Markets.

(Graphic: Travel stocks on recovery path, but speed slow, )

The blue-chip FTSE 100 rose 0.4% to end at a one-month high of 7,161.04 points.

Flutter Entertainment jumped 7.8% and was the best performer on the index, after it said it expects a U.S. profit in 2023, despite a 12% drop in first-half earnings.

Energy stocks recovered from a slump on Monday, tracking a recovery in oil prices. Mining stocks rose as concerns over Chilean copper supply supported metal prices.

British insurer and asset manager M&G dropped 3.1% to the bottom of the FTSE 100 even after it posted an above-forecast 6% rise in first-half operating profit and said it was on track to meet its end-2022 capital generation target.

(Reporting by Shashank Nayar and Ambar Warrick in Bengaluru; Editing by Subhranshu Sahu and Angus MacSwan)

By Shashank Nayar and Ambar Warrick