The London market stepped up after the Bank of England said the UK showed "no clear signs" of a sharp economic slowdown following the Brexit vote.
The FTSE 100 Index closed above the 6,700 mark, up 31.62 points to 6728.99, after a report by the Bank's agents said there was little sign of employment and investment being hit in the short term by Britain's exit from the European Union, but added that uncertainty had "risen markedly".
The rise on London's top flight came as sterling regained some ground thanks to a strong set of employment figures for the UK.
The pound was 0.5% higher against the dollar at 1.317 US dollars following another fall in unemployment and a record number of people in work.
The employment rate reached a record high of 74.4%, with 31.7 million people in work in the three months to May - 176,000 more than the previous quarter.
A total of 1.65 million people are unemployed, a fall of 54,000 over the quarter and 201,000 compared with a year ago, giving a jobless rate of 4.9%.
But the claimant count, including those on Jobseeker's Allowance, increased by 400 last month to 759,100, the fourth consecutive monthly rise.
The pound also rose against the euro, up 0.6% to 1.196 euros.
European markets were enjoying a strong session, with Germany's Dax surging 1.6% and the Cac 40 in France lifting 1.1% ahead of the European Central Bank's meeting on Thursday.
The price of oil was up 0.8% to 47.05 US dollars a barrel after the American government reported declines in crude inventory for the ninth week in a row.
In stocks, financial firms and housebuilders made gains after taking a battering in the aftermath of the referendum result.
Standard Chartered was up 2% or 15.7p to 617.5p and Charles Church builder Persimmon rallied 39p higher to 1650p.
However, miners were left languishing in the red after Anglo American slashed its guidance for copper and iron ore output in an update for the second quarter.
The London-listed firm was at the top of the biggest fallers, with shares down 4% or 39.2p to 774.4p, while Glencore slipped 3.7p to 176.2p and BHP Billiton dropped 22.1p to 926.4p.
Away from the top tier, TalkTalk slid 3% or 6.7p to 216p after saying its broadband customer base remains 9,000 lower despite halting the exodus from the firm following last year's cyber attack.
The FTSE 250 company said revenues held largely firm, edging 0.4% lower in its first quarter, as it continued to cut costs and grew its corporate business to help offset the impact of the hack last October, which resulted in the personal data of nearly 160,000 people being accessed.
Travel stocks were under pressure after budget airline Wizz Air became the latest firm to reveal a blow from the Brexit-hit pound as it cut plans to expand flights from Britain.
The Eastern and Central European carrier, which is listed in London, had aimed to boost its routes from the UK with more services, but said it would now halve these growth plans due to the recent plunge in the value of the pound.
Shares in Wizz Air were down 18p to 1525p, while British Airways-owner IAG slipped 2.8p to 420.7p.
The biggest risers on the FTSE 100 Index were St James's Place up 39p to 898p, Legal & General up 5.9p to 197.3p, Sage Group up 20.5p to 697p, Admiral Group up 58p to 2103p.
The biggest fallers were Anglo American down 39.2p to 774.4p, Fresnillo down 58p to 1819p, Randgold Resources down 230p to 8710p, BHP Billiton down 22.1p to 926.4p.