FTSE hovers ahead of monetary policy decision

Investors faced a slew of economic data when markets opened this morning, but the Bank of England interest rate decision, due at midday, was set to dominate sentiment with an expectation of a three way split between members over whether to raise rates or whether the bank's programme of quantitative easing should be extended.

An interest rate decision is also due from the European Central Bank while August industrial production figures were due at 9.30.

This morning Halifax said that UK house prices had fallen 3.6% in September - the biggest drop since the bank started the index in 1983. 

More US jobs data is expected later today ahead of non-farm payrolls, the main employment figures, on Friday. Yesterday’s ADP employment survey suggested that private sector payrolls were down by 39,000 in September possibly affecting market confidence.

Last night Capital Economics said that ADP figures were unreliable: ‘It is still possible that those official figures (on Friday) could show an increase. Nevertheless, the recent deterioration in the ADP figures is really worrying. We’ve gone from a gain of 63,000 in May to 42,000 in July, 10,000 in August and now a 39,000 contraction.’

This morning the FTSE 100 was down 0.4%, a fall of 21 points to 5660.

Mining firms were dispersed among the main gainers and fallers. Kazakhmys was the biggest faller, down 3.8% at £14.26. The company’s chairman sold an 11% stake in a deal that is part of plans for the miner to be listed in Hong Kong. Antofagasta was also down 1.98% at £12.87 after making gains yesterday.  

Lloyds bank, which owns Halifax, was the second biggest faller on the FTSE 100, down nearly 2% at 75p.

The gold price stood as $1356 per ounce and oil was $85.5 per barrel.

The pound is worth $1.58 against the dollar and €1.14 against the Euro.