The FTSE-100 index closed at its highest level since March as traders bet on more stimulus measures to help the US economy.

They were confident Federal Reserve chairman Ben Bernanke would announce an additional tranche of quantitative easing after the London market had closed in an effort to breathe life into the lacklustre US economy.

The Footsie was 20.88 points higher at 5945.85 ahead of the announcement, with the Dow Jones Industrial Average also up in early trading.

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However, the pound was up against the US dollar at 1.61 with the markets still nervous over the outcome of debt talks involving President Barack Obama and house speaker John Boehner.

Politicians now have less than three weeks to agree a budget deal to avoid the impending fiscal cliff, which if unresolved could see automatic spending cuts and tax rises introduced.

The pound was down against the euro at 1.24 after Greece cleared the way to get its bailout money after reaching its goal to buy back £24 billion of bonds held by investors.

Better-than-expected UK unemployment figures also helped to buoy markets today.

The positive data from the UK labour market saw the number of jobless claims fall by 3000 in November, against expectations of an increase of 6000.

October's figure was also revised lower as the unemployment rate remained at 7.8%.

The top flight shares index has now gained for six sessions in a row and is around 6% higher than when it started the year.

In London, there was little in the way of major blue-chip corporate news so attention was focused on the retail sector after results from fashion chain Super Group. It reported a 13% rise in underlying pre-tax profits to £14.7 million in the six months to October 28 and said sales growth had picked up pace. However, the stock failed to respond to the update as Numis Securities said the figure was well short of its £17.4m estimate, and shares in the FTSE-250 index company posted a decline of 6.6%, or 39.5p, to 557p.

Transport group Stagecoach was 2.4p lower at 300p as it vowed to fight a lawsuit that will attempt to break up its sightseeing bus company in New York.

Meanwhile, shares in HMV jumped 30% – up 1p at 4.1p – after reports it was being helped in the run-up to Christmas by an estimated £40m of financial support from suppliers.

The biggest Footsie risers were Evraz, up 11.4p to 263.7p, and Tullow Oil, up 32p to 1182p. The biggest faller was Wm Morrison, down 3.2p to 266.8p.