Syria crisis weighs on blue chips
Fears of a US-led military strike against Syria kept UK blue chips under pressure as the threat of instability in the Middle East also sent oil prices racing higher.
The FTSE 100 Index clawed back some of its early session losses thanks to a positive start to trading on Wall Street, but remained in the red – closing down 10.9 points at 6430.1.
Investors have retreated to safe-haven assets, such as gold and government bonds, amid fears the Middle East tensions have the potential to trigger a major disruption to oil supply, even though Syria is not a major producer.
London Brent oil prices saw their biggest one-day rally in six months on Tuesday and were up another 0.4% to 115.6 US dollars a barrel yesterday.
New Bank of England governor Mark Carney's first UK public speech helped the pound move higher against most major currencies, except the dollar.
The central bank boss sought to reassure over its forward guidance, confirming that interest rates were not likely to be raised for at least three years, while he said more economy boosting measures would be considered if market expectations of rates hindered the recovery.
Banks also rose as Mr Carney unveiled details of a £90 billion boost to lending.