The FTSE 100 was up 2.08 per cent today as oil prices fell to a three-month low.

The fall in oil prices saw miners and energy stocks suffer, but other firms were boosted by the prospect of lower costs, and optimism grew as New York opened high.

The lower oil prices also added fuel to suggestions that an interest rate cut could come sooner rather than later.

The FTSE 100 closed up 110.90 points to 5,431.10.

Builders merchant Wolseley rose 14.58 per cent on talk that it could be selling its US operations.

HBOS and Legal & General were both up 12.01 per cent – as the bank saw its rating unaffected by a 72 per cent fall in profits and the insurer gained on profit rises.

Thomas Cook and TUI Travel were up 11.113 per cent and 10.03 per cent respectively off the falls in oil prices.

Man Group fell 7.91 per cent, Ferrexpo dropped 5.49 per cent, John Wood Group slid 4.85 per cent, Eurasian was down 4.66 per cent, and Tullow Oil lost 4.43 per cent.

In New York the Dow Jones was up 1.89 per cent at 16:55 BST.

Ryan Kneale, market analyst at BetsForTraders.com, said: “Falling commodity prices are giving everyone a lift today, not least the Bank of England and the European Central Bank, who will be breathing a bit easier ahead of their respective rate decisions on Thursday.

“Elsewhere banks are performing well following some robust earnings. It’s too early to tell whether we are in for a positive week, but the early signs indicate that it could be.”