THURSDAY MARKET CLOSE: FTSE up 1.5 per cent

Britain’s top share index jumped 1.5 per cent following reassurances from the US that it will take action to avert the upcoming debt ceiling deadline.

With fears of an unnecessary sovereign default from the world’s leading borrower receding, something of a relief rally took the FTSE 100 92.58 points higher, to 6,430.49. However, US politicians remain at loggerheads over the budget.

Alastair McCaig, market analyst at IG, said: “Optimism that a last minute agreement will avoid any chance of the US defaulting has given European markets a relief rally.

“The volume and enthusiasm of buying appears to represent more of a reshuffling of books than conviction buying. Regardless, the positive price movement across the markets will have been welcomed by traders battling fatigue from almost a month’s worth of negativity.”

Housebuilder Persimmon was the biggest blue chip riser for the second day running amid forecasts that it will reap the benefit of the UK Government’s extended Help to Buy housing scheme. Shares rose a further 5.7 per cent or 64p to 1,195p, having climbed by 5 per cent on Wednesday.

It was joined high up the risers’ board by Costa and Premier Inn owner Whitbread, which rose 122p to 3,114p ahead of interim results later this month and fresh speculation of a break-up of the group.

In the second tier, shares in retail chain WH Smith jumped 5.6 per cent or 47p to 882p after more strong figures from the FTSE 250 Index company, which said it would return an extra £50 million to shareholders

And Ladbrokes was 2.9 per cent higher, up 5.2p to 185p, after fresh takeover talk was ignited by the mystery purchase of a near 3 per cent stake in the struggling bookie.