By Michael Taylor

LONDON (Reuters) - Leading shares ended up 1.4 percent on Wednesday as U.S. indexes traded higher as investors on both sides of the Atlantic welcomed the Federal Reserve's reassurance on the world's largest economy.

A flurry of results and merger and acquisition activity also helped boost stock prices sending the FTSE 100 .FTSE 85.1 points higher to 6,393.9.

The Fed, after leaving interest rates unchanged on Tuesday, made comments which soothed investor fears over problems in mortgage and corporate loan markets.

Closer to home, the Bank of England's quarterly inflation report suggested one more quarter-point rate rise, to 6 percent, would leave inflation just above the 2 percent target in two years.

"I'm quite surprised to be honest," said David Jones, chief market analyst at CMC Markets. "The fact that the FTSE managed to push through the 6,400 level... a lot of people may well take the view that we're going to see more of an extended recovery."

"This is arguably the most positive the UK index has looked in a good few weeks...this afternoon the FTSE has mainly taken the lead from the U.S. markets."

"If we see these gains held onto until tomorrow, we should see further confidence return and more people piling back in, but they have been quite jittery for a few weeks now," Jones added.

On the upside, the insurance sector featured heavily, led by Standard Life (SL.L: Quote, Profile, Research) as investors covered short positions taken ahead of the company's forecast-beating first-half earnings on Tuesday. Its shares added 4.6 percent.