Update: FTSE jumps as Europe moves towards banking union

London's leading share index has notched up a 1.3% rise in early trading, as European policymakers announced plans to move towards a banking union.

Politicians at the EU's latest summit have put in place measures to create a single supervisory body for eurozone banks by the end of the year. Policymakers also agreed to allow EU bailout funds to bring down Spain's sky-high borrowing costs, as well restructuring Spain's €100bn bank recapitalisation plan. This will effectively remove the bailout burden from Spain's sovereign books, according to the FT. After hours of heated discussion policymakers also agreed the European Stability Mechanism will be able to lend to recapitalised banks without increasing a country's budget deficit....