Leading shares shrugged off a gloomy CBI survey and set of economic forecasts to reclaim the 5800 level.

The FTSE 100 climbed 61.6 to 5816.9.

Second liners underperformed the wider market, after BPB warned of harsh times ahead.

Once again, however, the liquidity drive was not reflected in the day's volume of 280m shares, which remained low in the absence of US investors.

Hopes of further monetary easing were boosted by the CBI's forecast of a 1.25 percentage point cut in the repo rate by mid-1999 to 5.5%.

This helped offset a dismal industrial trends survey, which said a manufacturing recession was "increasingly likely", and a cut in the CBI's growth forecast for 1999, to 0.7% from 1.2% in August.

Neil Parker, Treasury economist at The Royal Bank of Scotland, said the November monthly trends enquiry "makes for depressing reading".

Comments from various members of the Monetary Policy Committee on the Bank of England's November inflation report had little impact on the market, dealers said.

After a period of underperformance, Bass firmed on the back of brewery sector takeover activity.

Wolverhampton & Dudley made a £262m bid for Marston, Thompson & Evershed.

British Airways climbed 4.1% after announcing the purchase of Gatwick-based CityFlyer Express for £75m, subject to approval.

3i was well supported after saying its underlying performance remained strong despite a 9.8% drop in net asset value during the opening half of the year.

Shell rose 3% following a report in the Financial Times that Exxon (valued at $177bn) is in talks to buy rival Mobil ($61bn).