The FTSE 100 trading above the level seen before the shock vote to leave the European Union last week.
Having reached the same level on Thursday, comments made by the governor of the Bank of England, Mark Carney, pushed shares higher.
The FTSE 100, Frankfurt's Dax and Paris' Cac 40 markets all opened slightly higher on Friday before hitting some volatile trading. The FTSE 100 is now trading more than 150 points above its pre-referendum peak.
In the US, the Dow Jones and Nasdaq closed 1.33% higher with the S&P 500 up by a similar 1.36%.
The gains came after Mark Carney hinted that the Bank of England's Monetary Policy Committee would vote to cut interest rates for the first time over seven years to a new record low, and increase its quantitative easing package.
There was less positive news for the FTSE 250, however, which is much more exposed to the state of the UK economy. It was down 1% by 10am, and has only regained half of last week's losses.