London stock market got off to another positive start as speculation mounted over a possible interest rate cut.

The City was buoyed in early morning trading by Italy's decision to cut rates by a full percentage point, reinforcing hopes of reduction by the Bank Of England.

In the early morning session the FTSE-100 Index of top shares leaped up 36 points to 5267.5, despite a mixed day across the world.

Insurance company Norwich Union announced 600 jobs would be lost as part of its deal to buy rival insurance group London & Edinburgh for £315m.

Dealers baulked at the price, sending share prices down sharply by 7p to 430p.

Despite the gloom surrounding the retail sector Debenhams shot up 18p to 360p after the department store reported a 16% rise in its full year profits.

Property company Slough Estates raised its hostile offer for Bilton to 313.51p per share, compared to its previous offer of 290p a share.