FTSE closes at 5861.9
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The FTSE 100 Index closed 67.3 points ahead at 5861.9 after the Bank of England hinted it will not raise interest rates.
Governor Mervyn King said trying to resolve a 3.3 per cent rise in inflation in the next 12 months would cause 'unnecessary volatility'.
This cheered investors, with the top flight around 2 per cent ahead at one stage but falling after a poor start on Wall Street.
Barclays was up 11.5p to 340.5p, and Halifax Bank of Scotland rose strongly, up 10.75p to 326.75p, a gain of more than 3 per cent.
Royal Bank of Scotland rose nearly 3 per cent or 6.25p to 241.25p.
Premier Inn and Costa Coffee owner Whitbread also fared well, rising 4 per cent as the City cheered the group's first quarter figures.
The leisure firm's sales growth of 7.1 per cent sent shares up 48p to 1270p.
The top of the riser's board was occupied by mining firm Eurasian Natural Resources, which gained 6 per cent or 87p to 1491p.
Other miners on the front foot included Lonmin and Anglo American, which cheered 137p to 3266p and 135p to 3472p respectively.
But an easing of oil prices from Monday's record near-£140 a barrel did little good for airline British Airways, down 1.25p to 238p, while low-cost rival easyJet shed 5p to 308p.
The leading Footsie faller was publishing group Reed Elsevier, down almost 3 per cent after a downgrade for European media firms from analysts at Morgan Stanley.
Housebuilders were in the red once more, with Persimmon down 8.25p at 413p.
Winners: Eurasian Natural Resources, up 87p to 1491p, Amec up 43.5p to 951p, Lonmin up 137p at 3266p, and Anglo American which added 135p to 3472p.
Losers: Reed Elsevier, down 17.5p to 592p, Home Retail Group off 6.5p at 220p, Persimmon down 8.25p at 413p, and Standard Chartered, which closed down 29p at 1611p.
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