The blue-chip FTSE 100 index <.FTSE> rose 0.6 percent to 6,133.79 points, its highest level in around two months.

Shares in the London Stock Exchange (LSE) hit record highs, rising 7.2 percent after Intercontinental Exchange said it was considering a counter-offer for LSE, which is already in merger talks with Deutsche Boerse.

"Mergers and acquisitions activity is aiding sentiment and giving the FTSE a boost," said Brenda Kelly, head analyst at London Capital Group.

The rise in LSE offset the negative effects of a 10 percent slump in Barclays, after the British bank reported lower profits, slashed its dividend and announced a restructuring entailing the sale of its Africa business.

"Overall these are disappointing results, particularly due to the lowering of the dividend and financial targets," said Nicolas Ziegelasch, head of equity research at Killik & Co, commenting on Barclays' results.

Shares in equipment rental company Ashtead also dived 13 percent, with analysts citing concerns about a slowdown in Ashtead's main U.S. market.

Glencore also dipped, losing ground after a recent rally that had seen the stock climb more than 40 percent in the last month, after Glencore posted a drop in earnings.

The FTSE 100 remains down 2 percent since the start of 2016 and 14 percent below an April 2015 record high.

(Additional reporting by Kit Rees; Editing by Catherine Evans)

By Sudip Kar-Gupta