Morning Markets Update: Better-than-expected growth figures boost sterling and gilts

News that the UK economy had expanded twice as fast as forecast in the third-quarter gave a boost to sterling and gilts, but equities failed to benefit amid fears that the Bank of England's plans for further quantative easing will be put on the back burner.

By 10am the FTSE 100 index was posting a fall of 41 points to 5,711 and the Mid-250 index was 35 points down at 10,943

Insurers were among the day's worst performers after a cautious review of the sector from Bank of America, with Prudential at 616.5p, Legal & General 100.87p and Standard Life 224p between 2p and 16p lower.

The broker was more positive on Admiral, 18p better at £16,32, while Autonomy continued its recent recovery with a 15p rise to £14.80.

Barclays shed 3.45p to 278p as JP Morgan cut its target price to 320p from 330p and a negative note from Jefferies overshadowed Unilever.down 36p at £18.20.

Elsewhere miners came in for some profit-taking as the dollar recovered a little, with Eurasian Natural Resources off 24p at 902p.

Cairn Energy remained depressed at 387p, down 25p as analysts downgraded after a disappointing Greenland well report and ARM Holdings were on offer at 367.84p, down 21p after figures much as expected.

On a brighter note International Power put on 3.4p to 409p awaiting bid developments and other firm spots included Pearson at 959p, Invensys 314p and Reckitt Benckiser £34.35, up 2p to 17p.

Go-Ahead Group continued to reflect its upbeat trading outlook with a 51p jump to £13.24 and International Personal Finance improved 9p to 323.5p in response to a Numis buy recommendation.

The agreed private equity bid for Brit Insurance sparked speculative interest in Catlin, 7p better at 349p and CSR added 5p to 342p after positive notes from Numis and Citigroup.

Fidessa dropped 71p to £16.51 as analysts downgraded in response to a cautious trading update.