After a weak start, the FTSE 100 surged forward to close 4.42 per cent higher on hopes of an interest rate cut.

Ending the day at 4,639.50, the index rallied in afternoon trading after opening lower this morning.

Mining and energy stocks led the rally, as investors priced in an expected rate cut as the Bank of England’s monetary policy committee (MPC) meets tomorrow.

Although the MPC is not expected to announce a decision until Thursday, last month a rate cut was announced early on a Wednesday.

Kazakhmys shares soared 17.62 per cent, Eurasian Natural Resources rose 16.82 per cent and International Power was up 12 per cent.

Only a handful of blue-chip stocks were in the red by the end of the day, including Stagecoach Group down 5.64 per cent and Associated British Foods falling 1.34 per cent.

Royal Bank of Scotland, which reported further writedowns this morning, saw its shares recover to last night’s prices.

Anthony Grech, market strategist for IG Index, said: “As the world watches America go to the polls, this week has several turns ahead of it as global rate-setters gear up to slash the cost of borrowing.

“Although the mining sector has struggled and negative news from RBS could have unsettled investors, the prospect of lower base rates across Europe has been enough for another daily rise.”