London stocks rally as investors brace for Wednesday's Budget, with the Chancellor expected to pledge a £20.4bn investment boost

Chancellor John Healey is expected to unveil modest tax rises on Wednesday while trying to soothe the City and keep Labour backbenchers onside. He is reportedly preparing £20.4bn of extra cash for state-backed lenders over roughly five years. The FTSE 100 gained 0.7% on Monday to close at 10,767.33. Fidelity International's Tom Stevenson warned that bond and currency market reaction will matter more than the measures themselves.

The British Business Bank's capacity would rise from £25.6bn to £30.6bn.

The Treasury claims the cash will support 100,000 jobs by 2035.