The FTSE 100 Index advanced today despite Chancellor Alistair Darling’s gloomy predictions of soaring borrowing and the worst year for the UK economy since the Second World War.
A 3.5% decline this year will be followed by better-than-expected growth of 1.25% in 2010, Mr Darling said, but markets were focussing on comments from his US counterpart Tim Geithner.
The Treasury Secretary’s comments that banks had more than enough capital and his confidence over an eventual recovery helped the FTSE finish 43.2 points higher at 4030.7 as Wall Street also turned around early losses.
His comments helped top-flight banking stocks, while retail shares advanced after a leading City firm upgraded its price targets in the sector amid hopes of improved trading in the sector.
Next rallied more than 7%, or 98p to 1435p to surge up the leaders’ board while B&Q owner Kingfisher saw similar gains, finishing 12.1p up at 174.8p. Marks & Spencer cheered 17.75p to 329.25p.