London's stock market hits records as traders cheer George Osborne's budget

London’s FTSE has touched a fresh record high as George Osborne presented his last budget before the general election and as the US Federal Reserve dampened expectations of an early rise in interest rates.

Led by mining and energy companies, the FTSE 100 index gained more than 30 points to 6,982 in early trading, beating the previous intraday high of 6,974 hit on 2 March.

The index has fallen back to 6,972, but could set a new all-time closing high if it stays above the 6,961 mark reached on 5 March.

In recent weeks, London’s blue-chip index has been scaling new heights amid upbeat moods on Greece, the eurozone and the UK’s economic recovery.

The latest rally comes after Wednesday’s 107-point leap as traders cheered George Osborne’s budget. Tax changes to support North Sea oil producers benefited oil shares, while drinks companies raised a glass to the chancellor’s cuts in duty on beer, whisky and cider.

The Fed’s cautious tone came as a relief after widespread concerns that it would signal a rate hike soon following its latest meeting.

Fed chair Janet Yellen made clear that the central bank is in no rush to tighten policy, in light of weak inflation and the strong dollar. The Fed downgraded its growth outlook and slashed its inflation projections for this year.

US stock markets rallied, with the Dow Jones Industrial Average ending the day 227 points higher at 18,076.19.

“While the FOMC’s statement opened the door to a first hike in the Fed funds rate in June, a September lift-off for rates looks more likely. Indeed, a first hike as late as December can hardly be ruled out either. And the FOMC also made clear that the pace of tightening of the first hike is likely to be slower than it had previously thought too,” Chris Scicluna, an economist at Daiwa Capital Markets, said quoted by The Guardian.