A rebound in technology stocks combined with a cut in UK interest rates helped the broad UK market stage a strong rally yesterday.

The Bank of England cut interest rates by a quarter of a percentage point to 5.5 per cent, its second such move this year.

The move had been widely expected, especially after Monday's purchasing managers' index had shown that manufacturing activity was declining. Further signs of weakness in that sector came with the manufacturing output figures for February, which showed a gain of just 0.1 per cent compared with forecasts of 0.3 per cent. Output had fallen by 0.8 per cent in January.

The bank said there were "downside risks to UK activity from the slowdown in the global economy, the recent fall in equity markets and, in the short term, from foot-and-mouth disease". Analysts were encouraged by the final sentence of the statement, "the committee will continue to monitor the downside risks carefully", which seemed to point to further rate cuts.

The FTSE 100 index was already 70 points ahead by the time the rate cut was announced at noon. But, whereas on Wednesday the rally had been confined to the blue chips, yesterday all the main indices pushed higher.

The technology sector was particularly strong after Dell Computer of the US had announced, late on Wednesday, that it would meet its first-quarter earnings forecasts. The Dell announcement was not overwhelmingly bullish - the company made no comment about the rest of the year - but investors seized on the news like a man offered a pitcher of water in the midst of a desert trek.

The Techmark 100 index was particularly strong, jumping 72.53, or 4.1 per cent, to 1,836.97. Former market favourites such as Baltimore and Bookham were among the tech stocks to record double-digit percentage rises.

Turnover was fairly busy on the last day of the UK tax year, with 2.15 billion shares traded by the 6 p.m. count and 141,000 individual deals conducted.