The markets are drifting lower ahead of the key interest rate decision by the Bank of England at noon. Most forecasters are expecting a 25 basis point cut, with perhaps a statement hinting there will be no mad rush for further reductions.
Earlier today traders reported a rumour of a 50 basis point cut sweeping foreign exchange dealing rooms, although that may say more about the febrile state of the markets rather than the reality. One thing is pretty much certain: if there is no cut at all, the markets will take that rather badly. So at the moment it is a question of investors holding their nerve.
The FTSE 100 is now 38.9 points lower at 5836.5, with a host of trading statements from major companies.
Directories group Yell is a major faller, down 15% to 280.5p. Nine month earnings were up 10% but the key phrase in the statement was that conditions in the UK were toughening. Any hint of disappointment will not be tolerated at the moment, and so it has proved with Yell.
Roll-Royce also disappointed, down nearly 7%, while BT is almost 6% lower. But gas group BG bucked the trend, up 5% after a jump in fourth-quarter profits, as did engineering group Invensy, nearly 13% ahead.
Northern Rock added 5p to 103p as the government took the bank's debt onto its books.
Tory party deputy chairman Michael Ashcroft is in the spotlight, after two of his recruitment companies - Carlisle and Corporate Services - announced plans to merger. The combined business is expected to have sales of around £1bn, and Ashcroft will hold 53.4%.
