The index ended the day at 5,154.64, a rise of 45.74 points.

Fashion house Burberry was among the leading shares benefiting from positive noises coming from brokers over demand for luxury goods.

The firm ended the day up 5.55 per cent – topping the commodity stocks.

Tullow Oil rose 5.04 per cent, Kazakhmys gained 4.92 per cent, Antofagasta rose 4.64 per cent and Eurasian Natural Resources climbed 4.55 per cent.

Meanwhile, financial stocks took a hit today.

BAE Systems fell 2.64 per cent and Shire was down 2.11 per cent.

Segro fell 2.06 per cent and Vodafone dipped 1.75 per cent.

David Jones, chief market strategist at IG Index, said: "Once again the mining sector has dragged the market higher with numbers from Vedanta showing production was at maximum capacity over recent months.

"The Bank of England kept rates on hold, so no surprise there – but markets are less than clear as to which way quantitative easing may be headed in the months to come.

"With some members of the Monetary Policy Committee concerned that the most recent economic strength could just be something of a “dead cat bounce”, the Bank may still feel they need to give the UK a boost."

In New York, the Dow Joes was up 0.97 per cent to 9,819.59 at 11:53 EDT (16:53 BST), while the S&P 500 in Chicago gained 1.07 per cent.

At 08:48 BST the index stood at 5,159.83 – a gain of 50.93 points or 1.00 per cent.

Leading the gains was Vedanta Resources rose 5.42 per cent after production reports showed the miner recorded higher iron ore and zinc output.

Lonmin rose 3.77 per cent, Antofagasta climbed 3.76 per cent, Kazakhmys gained 3.64 per cent and Anglo American was up 3.50 per cent on the news.

The biggest drop was recorded by Shire – down 0.86 per cent – after UBS cut its rating on the pharmaceutical group yesterday to neutral from buy.

Thomas Cook was down 0.26 per cent, Reed Elsevier fell 0.21 per cent and Smith & Nephew dropped 0.19 per cent as losses were limited in early trading.

Last night in the US, trading was muted, with the Dow down 0.06 per cent and the S&P 500 up 0.32 per cent.

Overnight in Asia, the Nikkei gained 0.34 per cent and the Hang Seng rose 1.08 per cent.

In Europe the morning, the Dax gained 1.29 per cent and the Cac40 rose 1.40 per cent.

The Bank’s Monetary Policy Committee (MPC) will announce its monthly decision on interest rates as well as providing an update on its quantitative easing programme later today.

David Kern, chief economist at the British Chambers of Commerce (BCC), said the programme of pumping money back into the economy should be increased from its £175 billion limit to £200 billion.

He said: "Despite some positive signs that the UK recession may be ending, the very disappointing recent decline in manufacturing output provides a stark reminder that recovery is not guaranteed.

"Large-scale job losses and the persistent weakness in lending to companies remain serious problems that must be resolved. Recent figures show that annual growth in lending to non-financial companies remains negative, and the pace of decline continues to worsen.

"To counter the threat of a relapse, we urge the MPC to increase the quantitative easing stimulus to at least £200 billion, and to consider a lower – or even negative – interest rate on deposits held by commercial banks at the Bank of England. This would penalise banks hoarding cash, and provide an incentive to lend to viable, credit-worthy customers."

Interest rates currently stand at 0.5 per cent, a 300-year low, with experts claiming it may stay at the same level into 2010.

The monetary policy committee (MPC) also held its quantitative easing programme limit at £175 billion.

Some financial analysts had called for the programme to be increased to £200 billion.

David Kern, chief economist at the British Chambers of Commerce (BCC) earlier warned: "Despite some positive signs that the UK recession may be ending, the very disappointing recent decline in manufacturing output provides a stark reminder that recovery is not guaranteed.

"Large-scale job losses and the persistent weakness in lending to companies remain serious problems that must be resolved. Recent figures show that annual growth in lending to non-financial companies remains negative, and the pace of decline continues to worsen.

"To counter the threat of a relapse, we urge the MPC to increase the quantitative easing stimulus to at least £200 billion, and to consider a lower – or even negative – interest rate on deposits held by commercial banks at the Bank of England. This would penalise banks hoarding cash, and provide an incentive to lend to viable, credit-worthy customers."

Interest rates have been held at 0.5 per cent, a 300-year low, for a number of months now, with experts claiming it may stay at the same level into 2010.

Neil Young, CEO of Young Group, said today’s announcement did not come as a surprise.

"[The] base rate is unlikely to change until the Bank of England’s quantitative easing policy has ceased and, as expected, the monetary policy committee has delayed making any decision regarding changes to its programme until after next month’s quarterly inflation report."

Guardsman Jamie Janes, of 1st Battalion The Grenadier Guards, was on foot patrol near to Nad Ali District Centre in central Helmand province when he was killed in the blast on Monday morning.

Three of his colleagues were also wounded in the blast which was followed by an insurgent ambush.

Guardsman Janes died en route to hospital following the conclusion of fighting.

Lieutenant Colonel Roly Walker, commanding officer of the Grenadier Guards Battle Group, paid tribute to Guardsman Janes in a statement released by the MoD.

He said: "Jamie was a soldier to his heart, and a friend to all. He knew the dangers he would face in Afghanistan but he had the courage to keep soldiering.

"He stood tall amongst his fellow men as an experienced hand who willingly stepped forward to take on the difficult task of clearing routes, and he gave the less experienced soldiers in his section huge confidence.

"He leaves behind a strong impression and his memory will inspire us. I am hugely proud of him, and humbled by his sacrifice."

Defence secretary Bob Ainsworth added: "I was very sorry to learn of the death of Guardsman Jamie Janes, a soldier who I’m told had given exemplary service since joining the Army at 16 and had a promising career ahead of him.

"He had already shown his bravery, professionalism and dependability on a previous tour of Afghanistan and was an integral part of his company. He also clearly cared deeply about his family and my thoughts are with them at this very sad time."

Since operation began in Afghanistan eight years ago, 220 British service personnel have been killed.

However Financial Fraud Action UK urged consumers to still be careful with their cards, warning that despite losses for mail, internet and phone payments falling, internet banking fraud was up 55 per cent on last year.

Experts have said fraudsters may have turned to targeting foreign-issued cards.

Katy Worobec, head of fraud control, said: "Although it’s difficult to prove, we think that one of the reasons for this dip in card losses may simply be as a result of fraudsters realising that they can prosper more by targeting foreign-issued cards – particularly those without chip and PIN protection and which currently have stronger currencies than sterling.

"The fact that we’ve seen a 36 per cent increase in the first half of this year in the amount of fraud being committed on foreign issued cards here in the UK adds some weight to this theory."

Financial Fraud Action said there was the first ever fall in card-not-present fraud losses in the first half of this year, with cheque fraud losses down 26 per cent.

The industry body said: "The fraud to turnover rate on debit and credit cards amounted to 0.1 per cent in the first half of the year – reflecting the fact that only around a tenth of a penny is lost to fraud in every £1 spent on cards."

It added that Chip and PIN had undoubtedly continued to make it difficult for fraudsters to commit fraud, and the increasing use of sophisticated fraud screening detection tools by retailers and banks, as well as the continuing growth in the use of MasterCard SecureCode and Verified by Visa, was also having an effect.

Rumina Hassam, personal finance expert at uSwitch.com, commented: "Today’s figures, which indicate an overall drop in card fraud, are great news for both the industry and consumers. However, card ID theft has actually increased by 23 per cent which means consumers should do everything they can to protect themselves and make sure they do not play into the hands of criminals.

"The most effective way of monitoring the status of credit card accounts is to keep a close eye on credit reports."

At close the index stood at 5,108.90 – down 29.08 points or 0.57 per cent.

Leading the gains was Aviva, after the insurer revealed it was planning to list on the New York Stock Exchange, which would broaden the number of US shareholders – currently around 20 per cent.

The deal would not see new Aviva shares issued in New York.

The Aviva share price was up 3.80 per cent on the day.

Holiday Inn-owner InterContinental Hotels rose 3.32 per cent on reports of a recovery in the business travel market.

South African-based insurer Old Mutual rose 1.99 per cent, while Segro gained 2.33 per cent.

Sainsbury fell 3.28 per cent as it warned the recession could slow growth into 2010, while Admiral dropped 3.29 per cent as it went ex-dividend today.

Tullow Oil was down 3.23 per cent – cutting back some of its gains yesterday and Lonmin followed slipping 2.73 per cent.

In New York, the Dow was down 0.40 per cent at 11:49 EDT (16:49 BST) while the S&P 500 was down 0.13 per cent.

Frankfurt’s Dax was up 0.04 per cent today and the Cac 40 in Paris gained 0.09 per cent.

On the currency markets, the pound was down 0.08 per cent against the dollar to $1.591, while it gained 0.22 per cent over the euro to €1.084.

The poster for UlsterTrader.com received 44 complaints claiming it was offensive as it objectified women, degraded them and was sexist.

The advert with the line: “Nice headlamps, what do you look for in a car?” also drew complaints it implied that women, like cars, were commodities to be bought and sold.

UlsterTrader.com countered by claiming the advert did not use language that could be considered offensive, nor was the image particularly “raunchy”.

The company claimed their brand was one that used humour and fun plus the tongue-in-cheek advert would be attractive to both sexes.

They disagreed with the contention that it implied that women were commodities to be "bought or sold", or that the ad was sexist for implying women would not need to buy or sell a car.

They also disagreed that the poster was likely to cause serious or widespread offence.

The Advertising Standards Agency (ASA), however, noted complaints that the poster implied women could be bought or sold.

A statement released today declared: “We considered that the image of the woman’s cleavage coupled with the strapline ‘Nice Headlamps. What do you look for in a car?’ was likely to be seen to objectify and degrade women by linking attributes of a woman, her cleavage, to attributes of a car, the headlamps, in a way that would be seen to imply a woman, like a car, was to be selected for those attributes.

“We concluded that the poster had caused serious offence to some readers and was likely to cause widespread offence.”

As a result, the advertising watchdog ruled the advert should not appear again in its current form.

The index stood at 5,141.63 at 09:13 BST – a rise of 3.65 points or 0.07 per cent.

Last night, the Dow was up 1.37 per cent, as was the S&P 500.

In London Kingfisher led the gains up 3.80 per cent as it saw upgrades from UBS and Morgan Stanley.

InterContinental Hotels rose 3.13 per cent, Fresnillo gained 2.67 per cent and Severn Trent climbed 2.46 per cent.

Sainsbury led the drops down 3.53 per cent despite reporting a like-for-like sales increase of 5.4 per cent in the second quarter as it warned market growth would slow.

Admiral Group fell 3.20 per cent, Smith & Nephew was down 2.17 per cent and Inmarsat slid 1.47 per cent.

Joshua Raymond, market strategist at City Index, explained the last 48 hours on the markets have been "remarkable" showing "despite the alarmingly weak economic data of last week and poor UK production figures today, sentiment remains strong and investors are refusing to let go of the recovery grip".

He added: "The speed of the turnaround in the markets over the last 48 hours will concern many who will question the sustainability of equity gains that may have superseded economic data.

"However, the vigour of investors to buy equities badly beaten last week has inspired confidence that they simply do not want to see any significant price correction as of yet."

On the currency markets, the sterling was down 0.12 per cent against the euro to €1.080 and down 0.13 per cent against the dollar to $1.590.

General Sir Richard Dannatt alleges the prime minister rejected military chiefs’ advice for an extra 2,000 troops to be sent to Helmand province.

He told the Sun newspaper British soldiers are currently fighting with "part of one arm" tied behind their back.

In the interview, Sir Richard also branded ministers "pathetic" for allegedly trying to tarnish his reputation after he raised concerns over manpower and equipment in Afghanistan.

The 58-year-old said: "The military advice has been for an uplift since the beginning of 2009.

"If the military says we need more troops and we can supply them, then frankly they should take that advice and deploy up to the level we recommend.

"If it means finding more resources and putting more energy in, let’s do it.

"If you’re going to conduct an operation, you’re doing it for a reason – to succeed."

There are currently just over 9,000 British soldiers serving in Afghanistan, but there have been increasing calls for a rise in troop numbers as the fight against the Taliban continues to show signs of stalling.

Public opinion in Britain and the US has started to turn against the ongoing military campaign, especially in light of the controversial elections held during the summer.

Downing Street has denied Sir Richard’s claims that requests for an extra 2,000 troops were rejected.