The FTSE 100 had edged lower in morning trade, but added 0.3 percent in 15 minutes after the release of data showing that U.S. private-sector employers added 215,000 jobs in December, well above economists' expectations.
"The FTSE 100 spent most of the morning relatively flat with investors possibly awaiting the [U.S. data], which traditionally is used as a barometer for the all-important non-farm payrolls that are due for release tomorrow," Lee Armitage, Senior Trader at Accendo Markets, said, adding that the expectation-beating results helped markets across the board.
"The FTSE took a lead from this and moved back into the blue."
London's blue-chip index closed up 19.97 points, or 0.3 percent, at 6,047.34, having hit its highest level since July 2011 on Wednesday after a deal in the United States to avoid a series of tax hikes and spending cuts that threatened economic recovery, known as the "fiscal cliff".
Oil and Gas stocks gained 1.3 percent, and energy added the most points to the index, contributing 13 points to gains.
"The big move for the UK is the Oil and Gas sector is rallying, which is a much bigger sector for the UK than for Europe," Henry Lancaster, senior investment analyst at Coutts, said, adding that they were attractive on valuation grounds.
"Oil stocks look cheap and out of favour, so it's something we think could run on."
The heavyweighting of energy in the FTSE helped it to outperform European peers, Lancaster said, with the Spanish IBEX and the French CAC both losing 0.3 percent.
He added that the bigger gains in European indices yesterday meant that over the two days since the "fiscal cliff" deal was struck, there was little difference between returns in the UK and on European bourses.
Despite this, the UK's strong start to 2013 has seen it begin to reverse some of last year's underperformance, where it gained only six percent compared to 30 percent on the DAX. This combined with a weak domestic economy that is seen as at risk of a triple-dip recession.
However, high-street retailers were given a welcome boost by a strong festive trading update from Next, which led blue-chip gainers and suggest that domestic consumption was strong over the Christmas period.
The fashion firm rose 2.7 percent after it met fourth-quarter sales forecasts and lifted annual profit guidance, giving a boost to the retailers in a strong start to the festive trading update season.
Next's earnings quality score rose to 100 from 95 after its previous filing in June, which suggests the composition of earnings in the recent past is robust enough for its growth rate to be sustainable, according to Thomson Reuters Starmine data.