The FTSE 100 has ended a long wait to achieve a new record high.

The index, which comprises the 100 most valuable companies on the London Stock Exchange, closed Monday’s session on 8,023 points following a jump of 128 points or 1.6%.

That was the highest closing sum since February last year when the 8,000 barrier was breached for the first time in its history.

The previous record stood at 8,012.

The performance on Monday was driven by a strong showing for companies across the board, particularly financial and consumer-linked stocks such as those for retailers.

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The index has been gaining ground in recent weeks on growing hopes for a cut in UK interest rates as inflation eases – with strong evidence that the economy has turned a corner after the recession during the second half of last year.

Analysts credited the push for a new high on two main factors; confidence that a major escalation in the Middle East conflict will be avoided and a weakening in the value of the pound against the US dollar.

Sterling is trading at five-month lows against the greenback at just $1.23 and was half a cent down on the day.

This is a consequence of dollar strength as opposed to pound weakness as expectations are growing across the Atlantic that the Federal Reserve’s expected interest rate cuts are further down the track than had been predicted.

Higher interest rates tend to be supportive of a currency which, in this case, is the world’s reserve currency.

A weaker pound helps FTSE 100 constituent companies which make money in the United States.

That is because it boosts their bottom line when those dollar earnings are booked back in the UK and converted back to pounds.

The FTSE has largely lagged growth among its rivals since Brexit and was tamed by a succession of economic shocks but has been reclaiming some ground this year due to perceived low valuations versus competing stocks overseas.

Its lack of technology companies – which have tended to perform best globally since the pandemic – has been another factor behind the FTSE’s malaise.

Trading hubs also point to a competitive disadvantage through a 0.5% transaction tax on share purchases in UK firms.

The index traditionally struggles during times of world economic uncertainty as its 100 constituents are dominated by firms whose fortunes are directly linked to demand for basic commodities such as mining and industrial stocks.

However, the signs of growth starting to emerge are a positive, not only for the FTSE 100 but also pension pots.

The broader and more domestically-focused FTSE 250 is yet to climb back above the 20,000 points level but it saw gains of 1% on Monday.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said of the prospects ahead: “With growth in the UK not shooting the lights out, and inflationary pressures showing signs of easing, there is still optimism around about the prospect of interest rate cuts coming later in the summer, which appears to have helped the FTSE 100 climb higher.

“As lower borrowing costs are forecast later this year, amid a slightly more positive outlook for the economy, housebuilders have also headed sharply higher amid hopes that stronger demand will return for new homes.

“Ocado, J Sainsbury, Next, Marks and Spencer and Tesco have also been lifted amid hopes for more clement conditions for consumers.

“A handful of FTSE 100 listed companies, which breached record levels earlier in the month, are on course to climb back up to those highs, such as Rolls Royce and BAE Systems. Aerospace stocks have been pushed higher by ongoing conflicts and post-pandemic demand.”

The UK’s biggest water company has put forward an investment offer that could increase customer bills even more than the 40% rise it already requested.

Thames Water, which serves 16 million customers in the south of England, has proposed increasing spending by £1.1bn and revealed another potential £1.9bn investment in its network as part of new business plans to regulator Ofwat.

But, if approved, this could mean an additional £19 a year bill increase on top of its inital plan for bill payers to be charged 40% more.

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Even higher bills?

Under the utility’s proposed business plan, for the five years to 2030 bills will rise to £608 a year – a 40% rise.

The average bill is currently £432.60 a year.

But if the extra investment is given the go-ahead, it could mean customers have to pay 44% more instead – £627 a year by 2030.

An investment of £18.7bn had already been proposed but under revised plans an extra £1.1bn has been offered to go into “projects benefiting the environment”, Thames Water said.

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Regulatory approval is required for the plans, and Ofwat is due to publish its draft view on 12 June.

What’s going on at Thames Water?

Thames Water has had to rethink its business plan as it faces collapse under the weight of £15bn of debt.

Investors have refused to pump a previously agreed £500m into the business, leading its parent company to default on some of its debt.

Thames Water has blamed Ofwat for this, saying it had imposed regulations that made it “uninvestable”.

The government is reportedly drafting plans to bring the water giant under state control in the event of its collapse.

The company had £2.4bn cash available in February, enough for it to remain solvent until next year.

It is said to be in discussions with its existing shareholders – which include the Universities Superannuation Scheme (USS), China’s sovereign wealth fund, a Canadian pension fund, and the BT Pension Scheme.

The company has also come under intense scrutiny after missing sewage spill and leakage targets.

Thames Water said it discussed the original business plan “extensively with regulators and key stakeholders”.

An Ofwat spokesperson said: “Since October we have been in discussions with all companies, checking on their proposed plans and seeking further information.

“There has also been further information published in the last few months clarifying companies’ statutory commitments. Both these factors have required companies to review their proposed plans and revise their expenditure forecasts to reflect what would be required to fully comply with all statutory requirements.”

A pack of private equity investors have left the starting grid in a race to buy TeamSport, the pan-European go-karting operator.

Sky News has learnt that several buyout firms have tabled initial offers for the company, which is expected to fetch more than £150m.

Insiders said on Sunday that EMK Capital and Livingbridge were among the private equity firms which had lodged first-round bids.

TeamSport is owned by Duke Street, one of the UK’s best-known buyout firms and the former owner of Wagamama, and is the largest indoor go-karting operator in the country.

Harris Williams, the investment bank, is overseeing the auction.

TeamSport trades from 35 sites in the UK, three in Germany and two in the Netherlands.

It operates within an activities & attractions market worth £73bn across the three countries.

Industry sources said that the company’s suitors had been attracted by the potential to grow it to 200 sites across its existing markets alone.

3i, the London-listed group, also showed an interest in buying TeamSport but is no longer involved, according to a person close to it.

All of the parties contacted by Sky News declined to comment.