A fifth consecutive session of gains helped the FTSE 100 Index close at its highest level in a month yesterday.

During a quiet trading session, the Footsie broke through the 4500 barrier to end the day up 13.2 at 4504.8.

Better than expected industrial output figures helped sustain the market despite a bout of profit taking.

A report showed that manufacturers have stopped cutting jobs and enjoyed the biggest upturn in orders for more than seven years.

But the prospect of an interest rate rise tomorrow restricted further progress in the markets.

Economists told MPs that an interest rate rise was needed to cool the overheating housing market, with one calling for an increase of as much as a half a per cent.

Paul Webb, trader at deal4free.com, said: "Any hike in rates would once again resume the downward pressure on London equities, but ahead of the verdict, the London index may struggle to find much direction."

Financial stocks were among the climbers yesterday, with Abbey National rising after talk resurfaced about a potential bid for the group by Spanish bank Santander. Abbey shares climbed 6p to 474p.

Other banking and insurance companies on the rise included Royal Bank of Scotland, 12p ahead at 1679p, Alliance and Leicester, advancing 10p to 845p, Bradford and Bingley, climbing 1p to 282p and Northern Rock rising 9p to 743p.

Among companies in the spotlight was utility company Severn Trent, which lost 8p to 808p, despite saying annual underlying profits had returned to growth. Broker CSFB said the figures were in line with guidance and consensus, but highlighted pension charge concerns.

Mining groups were still in upbeat mood after Monday's gains. Antofagasta climbed 5p to 914p, Xstrata gained 4p to 711p and BHP Billiton rose 1p to 461p.

BP and Shell were in the black, up 3p and 1p to 492p and 400p respectively, despite the impact of lower oil prices.

Outside the top flight, tour operator First Choice Holidays weakened p to close at 126p, despite announcing reduced losses for its quieter winter period.

Logistics group Christian Salvesen fell 1p to 48p as it failed to ease the disappointment of a 15 per cent fall in annual profits to £17.1m.

Hospital entertainment group Patientline rose eight per cent, or 9p, to 112p, as it stepped up its drive for profitability by detailing plans for the launch of new services.

Parasols maker Chapelthorpe was also ahead, up 1p to 18p, as it doubled annual profits.

However, the group said that demand for umbrella frames was down, despite the summer heatwave.