Housebuilders are dominating the risers in the leading index, boosted by reports that the UK government is planning a cut to stamp duty to boost the housing market.
Leaving aside whether this is a good idea or not, investors in the sector will be pleased.
Persimmon PLC has put on 4.53%, Taylor Wimpey PLC (LON:TW) is up 3.79%, Berkeley Group Holdings PLC is 3.76% better and Barratt Developments PLC (LON:BDEV) has climbed 3.26%.
Meanwhile the bellicose comments from Russia's President Putin have helped push up defence company BAE Systems PLC by 4.77%.
8.19am: Footsie surprises at the open
Leading shares have confounded expectations and are on the rise at the open as investors prepare for a US rate rise tonight, a UK one tomorrow and a mini-budget on Friday.
Despite Britain borrowing more than expected in August and worries about the war in Ukraine after a speech from Russian president Putin, the FTSE 100 is up 17.94 points at 7210.6.
A fall in the pound to a new 37 year low has helped the dollar earners in the blue chip index, while Aveva Group (LSE:LON:AVV) is up 2.3% after agreeing a full takeover by France's Schneider Electric (EPA:SCHN)
8.02am: Putin speech spooks currency markets, pound drops
Despite the prospect of a hefty UK rate rise tomorrow, the pound has hit a new 37 year low.
Against the dollar it fell as low as US$1.1305 but has recovered slightly to US$1.1338, down 0.358%.
On Friday it hit US$1.1351, which was then the lowest since 1985.
The dollar is benefiting from its status as a haven for investors at times of uncertainty, and markets which are already worried about rising rates and the cost of living have been additionally spooked by a speech by Russian president Putin.
He announced the partial mobilisation of forces in Russia, backed referendums in four Russian-controlled regions in Ukraine and said the West "had crossed all lines" in its "aggressive anti-Russian policy."
7.41am: UK public sector debt hits £11.82bn
UK government borrowing came in higher than expected in August, with rising inflation pushing up the deficit.
Public sector borrowing excluding state owned banks came in at £11.82bn, much higher than the £8.45bn forecast by economists.
Public sector net borrowing excluding public sector banks was £11.8 billion in August 2022.This was £2.6 billion less than in August 2021 but £6.5 billion more than in pre-COVID August 2019, when it was £5.3 billion https://t.co/42s1SHr9Lq pic.twitter.com/jPtHGoZglI
— Office for National Statistics (ONS) (@ONS) September 21, 2022
Britain spent £8.2bn on interest payments on central government debt, which includes £4.7bn from the impact of higher inflation.
This will put further pressure on the UK goverment as it prepares to unveil more of its energy plans today and a mini-budget on Friday, notably how it will pay for it all.
7.00am: FTSE seen slightly lower at the open
FTSE 100 expected to open slightly lower following falls in the US overnight with attention focused on the Fed’s interest rate call later today.
Spread betting companies are calling London’s blue-chip index down by around 10 points.
US markets endured another dismal session as investors braced themselves for a large interest rate increase tomorrow and as Ford Motor (NYSE:F) Co. slumped 12.3% after warning of a US$1bn hit from inflationary pressures together with supply chain issues.
At the close the Dow Jones Industrial Average was down 313 points, or 1.01%, to 30,707.08, the S&P 500 fell 44 points, or 1.13%, to 3,856 and the Nasdaq Composite slipped 110 points, or 0.95%, to 11,425.
Michael Hewson, chief market analyst at CMC Markets UK, said: "The main question today is whether we see the Fed move by 75bps today, or by 100bps which some started to call for in the middle of last week, after US core prices turned out to be much stickier than expected.
"This shift in the market thinking probably has more to do with what happened the last time we got a hotter than expected rise in US CPI during a blackout period, which prompted the Fed to shift to a much more aggressive hike by way of leaking to friendly journalists over the weekend in a move that saw the Fed come under heavy criticism. This begs the question as to whether they would go down this route again and hike by 100bps instead of 75bps.
"This still seems an outlier especially as rates are much higher now than they were then, along with the lack of any briefing to the contrary over the weekend."
In the UK, results are due from Alphawave IP Group PLC and Pendragon PLC amongst others.