FTSE 100 hits two-year high as investors back US recovery plan
The FTSE 100 Index hit a two-year high as investors were cheered by the US Federal Reserve's move to boost the economic recovery.
The London market marched ahead nearly 2% or 110 points to 5859 - its highest level since June 2008 - although the Bank of England left the extent of its own emergency measures unchanged.
The Fed opted to inject a further $600bn (£372.8bn) into its quantitative easing programme - dubbed QE2 - in a bid to kick-start its lagging recovery.
Analysts said many companies on the UK market do business with the US and could feel the benefits of QE2 if the package is successful.
Meanwhile, Bank of England policymakers held interest rates at an historic low of 0.5% and resisted pressure to pump more cash into the economy, despite fears surrounding the Government's deficit-busting spending cuts announced last month.
Analysts suspect the Bank will reveal its QE2 package early next year - possibly injecting a further £50bn on top of the existing £200bn - as the country starts to feel the pain of far-reaching austerity measures.
Chancellor George Osborne yesterday defended those austerity measures and announced he would deliver his 2011 Budget on March 23.
Michael Hall, managing partner of business advisors Ernst & Young Northern Ireland, said: "This will be welcomed by businesses in Northern Ireland and across the UK who are normally given just a few weeks' notice.
"Such an approach will help in planning and ensuring that businesses can actively participate in the ongoing debate on tax policy and engage appropriately in the tax policy-making process."