London stocks hit over one-week highs on UK policy reversal optimism

(Reuters) - UK's blue-chip and mid-cap indexes hit their highest levels in more than a week on Tuesday, lifted by a historic reversal of the government's unfunded tax cut plans and earnings optimism that boosted Wall Street indexes overnight.

The blue-chip FTSE 100 gained 0.8% by 0713 GMT and the mid-cap FTSE 250 rose 0.7%. The FTSE 100 hit its highest since Oct. 10, while the FTSE 250 rose to a level not seen since Oct. 7.

U.S. stock indexes closed sharply higher on Monday after Bank of America posted solid results, spurring earnings optimism. [.N]

Investors also appeared to take comfort from reports that the Bank of England is likely to further delay the Oct. 31 start of its sales of billions of pounds of government bonds to help stabilise the bond markets after Britain's failed "mini" budget.

Britain's new finance minister Jeremy Hunt on Monday scrapped Prime Minister Liz Truss's economic plan and scaled back her vast energy support scheme, making a historic policy U-turn to try to stem a dramatic loss of investor confidence.

Among single stocks, Bellway Plc slipped 1% as the homebuilder warned of moderating demand. Its shares had hit an eight-year low recently as homebuilders came under pressure from concerns about surging mortgage rates denting affordability.

Moneysupermarket.com jumped 4.3% after the insurance-price comparison website said it expected annual core profit to be at the upper end of market views.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu)