The FTSE 100 closed up 34 points at 4,559 and UK share prices rose for the third day in four, after the Bank of England left the base rate unchanged at 4%.
Banking stocks made the best gains as HBOS rose 21.5p to 764p, Lloyds TSB gained 2.9% to 456p and Barclays, the UK's third biggest lender, also added 1.2% to 496.5p.
British Airways, Europe's largest airline, jumped 4p to 315.5p after an analyst at Citigroup increased his price forecast to 450p from 350p because of the rise in business travel and cost cutting at BA.
Psion, the maker of handheld computers and wireless services, saw its share price drop shed 1.5p to 60p, after the company announced its plans to sell its stake in mobile-phone venture Symbian, despite the move being opposed by its biggest shareholder.
Shell Transport & Trading also closed down declined 2.5p to 381p after Credit Suisse First Boston recommended investors sell the shares and buy BP, Total SA or Eni SpA instead.
Marks & Spencer also dropped 10p to 292.25p.
And in the US, the Dow Jones Industrial Average index is currently down 1.19 points to 10,591.92, while the S&P 500 index has so far gained 2.11 points to 1,153.15.
The Nasdaq Composite index is currently up 11.44 points to 2,044.80.IFAonline
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