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Reassurance on UK growth boosts the blue chip index

BRITAIN&rsquo;S top share index closed higher yesterday, as risk appetite received a boost after reassuring signals on the UK economy, and with miners the biggest gainers after a jump in Chinese factory growth.<br /><br />The FTSE 100 index ended 36.20 points higher, or 0.7 per cent, at 5,266.75, having touched a high of 5,301.14 earlier in the session, a level not reached since September 2008.<br /><br />&ldquo;On the whole the market has reacted well to some quite optimistic comments from the Bank of England inflation report,&rdquo; said Angus Campbell, head of sales at Capital Spreads.<br /><br />&ldquo;They seem to think that a V-shaped recovery is very much underway and we won&rsquo;t dip back into recession,&rdquo; he said.<br /><br />UK unemployment numbers were also welcomed. The number of Britons claiming jobless benefit in October rose by its smallest amount in 18 months, while the number of people in work rose for the first time in over a year, official data showed. <br /><br />Miners shone, with investors heartened by data from China where factory output jumped to a 19-month high in October, and as the weak dollar buoyed metals prices.<br /><br />A record gold price helped <strong>Randgold Resources</strong>, up 6.1 per cent, hit an all-time peak and rebound from a dip after Tuesday&rsquo;s announcement of lower-than-expected quarterly profit.<br /><br /><strong>Fresnillo, Rio Tinto, Lonmin, Antofagasta </strong>and<strong> BHP Billiton</strong> added 2.1 to 5.9 per cent.<br /><br />The Bank of England said in its quarterly Inflation Report that inflation would be below target in two years&rsquo; time if interest rates rise gradually from the middle of next year as financial markets expect.<br /><br />However overall the Monetary Policy Committee saw broadly balanced risks of inflation being above or below their 2 per cent target by late 2011, suggesting little immediate need for more quantitative easing.<br /><br />Upbeat UK economic news gave banks, often beneficiaries of improved risk appetite, a shot in the arm.<br /><br /><strong>HSBC</strong> put on 0.9 per cent, extending Tuesday&rsquo;s gain following its third-quarter update, while <strong>Standard Chartered&nbsp; </strong>and <strong>Lloyds Banking Group </strong>added 1.3 per cent and 4.7 per cent, respectively.<br /><br /><strong>Barclays</strong>, however, extended losses made the previous session after its update, shedding 0.7 per cent, and <strong>Royal Bank of Scotland </strong>fell 1.7 per cent. Positive broker sentiment aided Schroders, up 3.7 per cent, with <strong>UBS, Morgan Stanley</strong> and <strong>Citigroup</strong> all raising their price targets for the UK fund firm after its update on Tuesday.