Pound at two-week high as FTSE 100 posts best day since June – as it happened

People outside the Bank of England in the City of London’s financial district in London. Photograph: Henry Nicholls/Reuters

4.47pm BST

Closing post

With the pound continuing to strengthen against the US dollar, up a cent to $1.143, it’s time to wrap up.

Here are today’s main stories:

4.43pm BST

FTSE 100 posts best day since June despite latest government confusion

Britain’s stock market has just posted its best day in over three months.

The FTSE 100 index, which contains the largest blue-chip shares in London, has just closed over 2.5% higher tonight. That’s the biggest percentage gain since 24th June, despite the confusion over the date of Kwasi Kwarteng’s debt-reduction plan.

The Footsie rallied by 178 points to finish at 7086 points, on a day of large gains across the markets.

Gambling group Flutter (+9.2%) and online grocery business Ocado (+8.8%) were the top risers, with British Airways’ parent company IAG (+7.9%), and several financial services companies, also having strong days.

European stock close:
Big gains led by leisure and travel. All sectors in positive territory:

-DAX: +3.72%
-FTSE: + 2.57%
-CAC: +4.24%

— DailyFX Team Live (@DailyFXTeam) October 4, 2022

Victoria Scholar, head of investment at Interactive Investor, sums up the day:

It was understood the government was considering bringing the date of the Medium-Term Fiscal Plan forward but now both the Chancellor and the Prime Minister have confirmed it will take place on 23rd November after all. That is also when the Office for Budget Responsibility (OBR) will publish its updated forecasts as well.

This week the Chancellor staged a U-turn by undoing plans to abolish the 45p top rate of tax. It was also expected that he was also going to announce the medium-term fiscal plan sooner in the coming days or weeks in an attempt to reassure the markets after last week’s turmoil. However it seems like that is no longer the case.

There seems to be a lot of confusion, but the markets are in a very positive mood nonetheless, lifted by broader momentum from a strong rally on Wall Street yesterday to kick off the fourth quarter after US treasury yields pulled back. Most markets in Asia closed sharply higher with positive momentum carrying forward to the European session with the CAC 40 in France surging by almost 4%.

Investors will be hoping that this marks the start of a Santa rally in the final months of the year to offset some of this year’s pain for long equity holders.