The FTSE 100 closed up 107.59 points, or 1.6 per cent, at 6,945.20, shy of its all-time high at 6,974 points hit earlier this month.
Shares in investment company Hargreaves Lansdown and wealth manager St James’s Place rose 5.2 per cent and 2.7 per cent respectively after the government announced fresh changes to the savings system in its last Budget before the election on 7 May.
Oil stocks also rose after the government announced tax breaks for North Sea firms. Energy stocks added 13 points to the index, although with the news widely anticipated, some of the sharpest individual movers struggled to hold on to gains.
Mid-cap pub operator JD Wetherspoon rose 1.1 per cent after Osborne announced a cut in tax on beer.
FTSE outperformed Germany’s Dax, France’s Cac and Italy’s FTSE Mib, which were flat to 0.7 per cent lower.