Leading shares have lost some of their early gains in the wake of the - widely expected - 100 basis point cut in UK interest rates.
The FTSE 100 was sitting at 4206 before the noon decision, but is now at 4185.02, up 15.06, having briefly slipped into negative territory.
The pound, which was down at $1.459 before the rate news, has now edged up to $1.465.
Mark Priest, senior trader at ETX Capital, the spread betting company, said:
"The market had a 1% cut priced in, and would have taken a grim view of anything less, especially after the latest survey of house prices from Halifax this morning."
Edward Menashy, chief economist at Charles Stanley said:
"According to the Bank of England, there is a one in five chance of the UK economy going into deflation which would be a boon for bonds and anathema for equities."
