The London market rose sharply, after poor Chinese data fuelled hopes of further money-boosting measures from the world's second largest economy.
The FTSE 100 Index jumped 96.9 points to 5876.8, after overnight data from Beijing showed China's economy grew at 6.9% last year, compared with 7.3% in 2014, its lowest level in 25 years.
However, traders gambled this would lead to China stepping up the devaluation of its yuan currency, or taking other efforts to stimulate growth.
The market was also boosted after UK consumer price inflation edged up to 0.2% in December from 0.1% in November, its highest level for eleven months as a steep rise in air fares over the Christmas holidays offset falling food and clothing prices.
This unexpected rise in the ultra-low level of inflation is a sign the economy is heading towards a more normal footing.
Germany's DAX lifted 1.5%, while the Cac 40 in France was 2% higher.
The pound was a cent down against the US dollar at just under 1.42, sinking to a seven-year low, after Bank of England governor Mark Carney in a speech today pushed back the prospect of an interest rate hike due to the slowing UK economy.
Traders set back their expectations for an interest rate rise until well into 2017.
Sterling was also a cent down against the euro, at just under 1.30.
In London, Dove maker Unilever lifted 91p to 2934p, after the household goods giant posted full-year net profit down 5% to 5.3 billion euro (£4 billion), but ahead of expectations.
Chief executive Paul Polman said: "Despite a challenging year with slower global economic growth, intensifying geopolitical instability and high currency and commodity volatility, we have again grown ahead of our markets, driven by our innovations and increased support behind our brands."
Keith Bowman, equity analyst at Hargreaves Lansdown, added: "Unilever appears to be firmly back on track. Fourth quarter underlying sales have exceeded forecasts, underpinned by ongoing product innovation and brand investments."
Miners were also higher on hopes that China will boost its stimulus measures. Anglo American was 6.2p higher to 238.8p, Glencore was up 3.8p to 79p and Rio Tinto lifted 24.5p to 1657p.
Plumb Center and Pipe Center owner Wolseley lifted 72p to 3367p, a day after it said that chief executive Ian Meakins will step down at the end of August after seven years in the role.
The group, which is the world's biggest supplier of plumbing and building materials, said its current finance director John Martin will take up the top job at the end of the summer.
The biggest risers in the FTSE 100 Index were TUI up 65p at 1236p, Glencore up 3.8p at 79p, Berkeley Group up 142p at 3572p and CRH up 70p at 1823p.
The biggest fallers in the FTSE 100 Index were Randgold Resources down 104p at 4268p, Tesco down 2.5p at 159.1p, Fresnillo down 10p at 664.5p and Pearson down 7.5p at 684.5p.
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