The FTSE 100 rose on Wednesday ahead of Rishi Sunak’s Budget speech in which he has promised to do "whatever it takes" to protect UK jobs and livelihoods.
The FTSE followed European and Asian markets higher, adding to rises earlier in the week.
London's index of leading companies' shares gained 1.2 per cent in morning trading to reach 6,691.85.
Housebuilders Barratt, Persimmon and Taylor Wimpey were all up more than 3 per cent on news that the government would pump more money into supporting the housing market.
Firms that look set to benefit most from the coronavirus vaccine rollout and a return to more normal activity led the charge higher.
Whitbread, which owns Premier Inn, Beefeater and Brewers Fayre, jumped 4.8 per cent. Pubs were rumoured to be in line for further help from the government in Wednesday’s Budget.
Catering giant Compass Group was up 3 per cent, JD Sports 3.1 per cent and British Airways owner International Consolidated Airlines Group up 4 per cent.
Ryanair rose 3.2 per cent, easyJet 3 per cent and travel operator Tui 2 per cent.
Banks were also mainly in positive territory with Barclays, HSBC and Standard Chartered all registering share price gains.
The government has revealed several of its big plans ahead of the Budget, including an extension of the furlough scheme which has supported millions of workers' wages and helped employers get through the pandemic.
Home buyers and developers will also benefit from government guarantees for mortgages covering up to 95 per cent of the cost of a property.
Traders’ eyes will be trained on the Office for Budget Responsibility’s forecasts for the UK economy and public borrowing which are expected to show a more rapid recovery than had been predicted in November.
Across the Channel European indices were mostly up with the STOXX 600 adding 0.7 per cent while in Frankfurt shares climbing 0.9 per cent to a record high. France’s CAC 40 rose 0.8 per cent.
Wall Street dipped on Tuesday on the back of growing fears that stocks including Apple and Tesla may be overvalued.