FTSE 100 rises ahead of news from US Fed

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(Close): The London market closed higher on hopes that the US Federal Reserve would indicate that it is in no hurry to increase interest rates.

The FTSE 100 index finished 0.8% higher at 6,453.

Traders were confident that the Fed will confirm the end of its policy of quantitative easing and keep interest rates on hold well into next year.

Intertek was the biggest winner on the FTSE 100, rising 5% on positive comments from two investment banks.

Business services provider, Capita, fell almost 6% after it lost out on a contract to run British rehabilitation centres for low and medium-risk offenders.

Shares in Next dropped 0.3% after it cut its full-year profit guidance. The milder-than-usual weather over the past couple of months has hit demand for winter clothes.

It now expects full-year profits of £750m-£790m, down from its previous guidance of £775m-£815m.

Other clothing retailers were hit by the news, with Marks and Spencer shares down 0.6% and Supergroup - the firm behind the Superdry brand - dropping 3.6%.

Shares in TUI Travel rose 3.3%. On Tuesday, TUI Travel and German company TUI AG approved the plan for the two to merge.

Fed meeting

The Fed's main policy making committee is meeting in Washington, where it is discussing whether to stop buying financial assets with newly created money.

Since late last year it has been gradually cutting back the scheme, which began in 2008.

The markets are expecting that the asset purchases will finally cease.

Ahead of that, on the currency markets, the pound was little changed against the dollar for the session at $1.61370.

It was 0.1% lower against the euro at €1.26510.