Britain’s benchmark FTSE 100 index needs more evidence of growth in corporate profits to break out of its recent trading range and challenge record highs of around 7,000 points, says Old Mutual Global Investors (OMGI) fund manager Richard Buxton.

“We’re churning around in a trading range of 6,200 to 6,800,” says Buxton, who is head of UK equities at OMGI.

“The market needs further evidence of growth in corporate profits to underpin an assault of the all-time high of just under 7,000,” he adds.

Buxton says the FTSE will break the 7,000 point barrier “at some stage”, but declines to give a timeframe for this.

The FTSE 100 hit a peak of 6,867 points in late January, its highest level since early 2000, but has since slipped back due to concerns over a slump in emerging markets economies and tensions between Russia and Western powers over Ukraine.

Buxton says the strength of sterling is acting as a headwind for the UK stock market at present, and adds that the FTSE could have a “wobble” ahead of a Scottish independence vote due in September.

“It’s quite likely the market may have a bit of a wobble in the run-up to the vote.”

Reuters messaging rm://sudip.kargupta.thomsonreuters.com@reuters.net