With no economic data releases in the UK, attention will turn to the US for reports on personal consumption, personal income and the University of Michigan’s confidence later on.

Also in the US, the International Monetary Fund said it is raising its growth outlook for the world’s biggest economy as a budget deal in Washington and the Federal Reserve’s plan to reduce its bond buying eased doubts about the future.

On this side of the Pond, Business Secretary Vince Cable has warned that interest rates my need to rise to constrain a housing boom in London and the south-east.

Speaking on BBC1’s Andrew Marr Show, he said there was a risk that large parts of London could be inhabited only by foreigners and bankers as house prices accelerated unless the Bank of England (BoE) raises interest rates.

However, he noted that increasing the rate could hurt manufacturing as it would affect exchange rates and impact exports.

“There is a raging housing boom in London and the south-east, and not in other parts of the country,” he said.

“The danger of raising interest rates is that you hit those parts of the country which are not yet fully recovered, you push up the exchange rate and that hits manufacturing. We don’t want that. On the other hand, if you do not increase interest rates – if that is the way the governor and the Bank of England go – then this boom that is taking place in housing prices gets out of control and the only people that can afford to live in large parts of London are foreigners and bankers, and we don’t want that either.”

The BoE has vowed to keep the main interest rate at 0.5% at least until unemployment falls to 7%.

Meanwhile, reports of suspected market manipulation have soared by 43% this year amid investigations by the UK financial regulator of rigging of multiple benchmark rates.

The Financial Conduct Authority received 117 reports of suspected “distortion and manipulation” of markets in the 12 months to August, compared with 82 in 2012, according to Bovill Ltd, a financial services consultant in London.

ARM Holdings, Hochschild Mining

ARM Holdings, which designs chips for Apple’s iPhones, jumped after Apple struck a deal to sell the smartphone through China Mobile.

Hochschild Mining advanced after completing the acquisition of a 40% stake in Pallancata mine and Inmaculada Advanced Project in Peru from International Minerals Corporation.

Serco Group gained after securing a six-month extension to its contract with the Australian Government Department of Immigration and Border Protection (DIBP) for the provision of detention services at immigration detention centres (IDC) and alternative places of detention (APOD) on mainland Australia and Christmas Island.

Cruise operator Carnival rallied after the cruise operator reported better-than-expected trading last week.

Persimmon slumped after Deutsche Bank reiterated a ‘hold’ rating on the homebuilder.

FTSE 100 – Risers
ARM Holdings (ARM) 1,097.00p +2.72%
Carnival (CCL) 2,421.00p +1.34%
BHP Billiton (BLT) 1,827.00p +1.19%
Vedanta Resources (VED) 858.00p +1.12%
SABMiller (SAB) 3,028.00p +0.97%
Anglo American (AAL) 1,272.50p +0.91%
Lloyds Banking Group (LLOY) 78.01p +0.91%
Aberdeen Asset Management (ADN) 469.50p +0.90%
United Utilities Group (UU.) 657.50p +0.84%
British American Tobacco (BATS) 3,200.00p +0.77%

FTSE 100 – Fallers
BT Group (BT.A) 374.20p -0.69%
Persimmon (PSN) 1,188.00p -0.50%
Melrose Industries (MRO) 285.40p -0.49%
Intertek Group (ITRK) 2,958.00p -0.44%
Babcock International Group (BAB) 1,305.00p -0.38%
Land Securities Group (LAND) 945.50p -0.37%
Burberry Group (BRBY) 1,460.00p -0.34%
Wolseley (WOS) 3,332.00p -0.33%
British Land Co (BLND) 617.50p -0.32%
RSA Insurance Group (RSA) 90.85p -0.27%

Source: ShareCast