FTSE breaks through 5,000 level

The FTSE 100 has risen on the back of strong corporate results

Leading UK shares have risen to their highest level for almost a year, with the FTSE 100 index rising above 5,000 points.

Shares have risen this week on the back of merger activity, with US Kraft Foods making a £10.2bn bid for UK chocolate maker Cadbury.

This has encouraged investors to think that risk appetite has returned to markets and that the recession is over.

Rising commodity prices have also helped to boost stocks.

The index closed up 57 points, or 1.2%, at 5004.30. It has not been this high since October last year.

European shares also performed well, with France's Cac 40 index rising 1.3% and Germany's Dax index climbing 1.7%.

Upbeat data

The FTSE has been rising since March, with confidence steadily building that the UK economy will soon come out of recession.

Upbeat economic data released this week has helped to convince many investors that recovery is already underway.

On Tuesday, the National Institute of Economic and Social Research said the economy grew 0.2% in the three months to August. In its eyes, therefore, the UK recession is officially over, although it did warn that "normal economic conditions" had not returned.

On the same day, figures also showed UK manufacturing output rising at its fastest rate in 18 months in July.

Earlier on Wednesday, a comprehensive survey of recruitment agencies also found that UK jobs market was starting to show signs of recovery.