The FTSE 100 Index continued its rebound as positive jobs and manufacturing data from the US ensured a last-minute push into the black.

It closed 24.1 points higher at 5418.6, following another strong session for the banks.

But the upbeat finish was triggered by a betterthan- expected US manufacturing report from the Institute for Supply Management.

Elsewhere, sentiment was boosted by a report from the Labor department, which showed US unemployment benefits falling to 409,000 last week.

The banking sector was buoyed after a report in the Financial Times said Business Secretary Vince Cable, the Cabinet’s most vocal bank critic, had accepted it may be impossible to implement the proposals of the Independent Commission on Banking before 2015.

Royal Bank of Scotland lifted eight per cent, or 1.98p to 26.3p, while a note from Investec Securities identifying Barclays as a standout buy helped its shares improve 9.6p to 180.4p.

Lloyds Banking Group was 2.1p stronger at 35.7p.

But the London market was dragged down after data from Markit showed manufacturing in Europe contracted to its lowest level since August 2009, with the German economy faring worse than expected, fuelling fears of a double dip recession.

Data from the UK showed that manufacturing activity sank to a 26- month low last month while the volume of new orders declined for the fourth month running.

The declines in London’s blue chip index were echoed across Europe, with the DAX in Germany down nearly one per cent.

Financial services firm Hargreaves Lansdown was up 17 per cent, after it offset recent worries about the impact of regulatory changes on its business by posting a 46 per cent rise in full-year profits to £126m.