The FTSE 100 surged on Monday as oil prices jumped and investors looked ahead to the US Federal Reserve's interest rate decision.

The UK's top tier index rose 1.5% or 103.3 points to 6813.6 points, with nearly all stocks finishing in positive territory.

Meanwhile, oil price gains drove the dollar lower, propelling sterling 0.4% higher to 1.306 against the greenback.

The pound was trading 0.2% higher against the euro at 1.168.

Global stocks rose on the back of expectations that the US Federal Reserve would stand pat on interest rates when it announced its monthly decision on Wednesday.

Connor Campbell, a financial analyst at SpeadEx, said: "It will be interesting to see if this momentum can continue to build tomorrow, or whether a) any pre-Fed jitters will set in as September's meeting grows ever closer or, related, b) the lack of data on Tuesday will cause investors with too much time on their hands to doubt the decisions they made this Monday."

Across Europe, the German Dax finished 0.95% higher, while the French Cac 40 rose 1.4%.

Oil markets staged a bounce, with global benchmark Brent crude prices rising 1.4% to 46.61 US dollars per barrel.

It follows reports that Opec could call an extraordinary meeting to ratify a potential supply deal made on the sidelines of next week's informal gathering of oil producers in Algeria.

Reports suggest the deal would include plans to stabilise oil markets amid a global supply glut.

Higher oil prices helped propel commodity-linked stocks to the top of the FTSE 100.

Glencore was the biggest gainer on the top tier index, rising 6.2% or 11.5p to 196.5p. Anglo American rose 46.5p to 860.9p, BHP Billiton jumped 36.4p to 1022.5p, and Rio Tinto rose 79.5p to 2359p.

However, the jump in oil prices took a bite out of travel stocks, with International Consolidated Airlines Group (IAG) closing lower by 3.1p to 415.8p, Easyjet dropping 5p to 1070p, and TUI AG falling 5p to 1062.p.

Away from the top tier index, the FTSE 250-listed shares of outsourcing group Mitie tumbled by 28.9% or 77.7p to 191.3p.

The firm, whose clients include Rolls-Royce and the Home Office, warned full-year profits would come in "materially below" expectations as uncertainty caused by the EU referendum, lower growth and higher staff costs hit the firm.

Also on the FTSE 250, Dairy Crest shares dropped 6.2% or 42p to 626p, after the company said it will be stung by a "sudden" 12% surge milk price inflation.

The company said that cream prices have been particularly affected, with the result being an impact on butter volumes and margins in the second half of the year.

The biggest gainers on the FTSE 100 were Glencore up 11.5p to 196.5p, Anglo American up 46.5p to 860.9p, Tesco up 7.1p to 176.4p, and Standard Chartered up by 22.9p to 630p.

The biggest losers on the FTSE 100 were International Consolidated Airlines Group (IAG) down 3.1p to 415.8p, Easyjet down 5p to 1070p, TUI AG down 5p to 1062p, and AstraZeneca down 16p to 5079p.