LONDON: The UK mid-caps index touched its highest level in two months on Tuesday as hopes of a stimulus-led rebound helped investors look past a mixed batch of quarterly earnings updates, while InterContinental Hotels rose after signalling a tentative recovery.

The Holiday Inn owner gained 4.7% after it said it was seeing some "very early" signs of returning demand as coronavirus-related restrictions eased in major markets. The mid-cap FTSE 250 rose for a third straight session, as Bank of England Deputy Governor Dave Ramsden said the central bank would step up quantitative easing if the economy slowed again. June gross domestic product figures are due on Wednesday.

The blue-chip FTSE 100 added 1.6%, tracking gains in Asia and on Wall Street on relief that a US-China spat appeared not to have spilled over into trade. Energy, life insurance and travel-related stocks were among the top gainers of the day, while homebuilders, utilities and real estate firms lagged the wider market. Housebuilder Bellway Plc fell 4.5% as it built fewer homes in the year due to the lockdown.