London markets fly out of the blocks as travel stocks surge

London markets flew higher yesterday driven higher by travel and leisure soaring on booking volumes climbing.

The capital’s premier FTSE 100 index closed 1.33 per cent higher at 7,469.78 points, while the domestically-focused FTSE 250 index, which is more aligned to the health of the UK economy, climbed 1.05 per cent to finish at 21,873.08 points.

Airlines and hotel groups led the day’s gains after the government scrapped testing for fully-vaccinated travellers entering England from 11 February.

Holiday bookings soared on the news as Brits rushed to pencil in getaways over the half-term and Easter school breaks.

British Airways owner IAG topped the FTSE 100, gaining 7.39 per cent, supported by Premier Inn owner Whitbread adding 2.36 per cent.

InterContinental Hotels Group was among the best performers on the City’s top index, advancing 2.8 per cent.

On the FTSE 250, airlines were the high flyers.

Tui and easyJet both finished more than five per cent higher.

“Changes to UK testing rules have seen a spike in demand for half-term holidays next month, and airlines will be hoping this also leads to greater ticket sales across the year,” Russ Mould, investment director at AJ Bell, said.

London markets also shrugged off fears that the US Federal Reserve is set to confirm its intention to start hiking interest rates from March at its meeting of rate setters yesterday.

The Fed did signal policy will tighten soon after London markets shut.

The pound lost ground on the greenback, weakening 0.2 per cent to buy $1.3469.