Footsie unruffled by interest rate decision

The Footsie index of 100 leading stocks is up 22.8 points at lunchtime after the Bank of England's Monetary Policy Committee's decided to keep the cost of borrowing at 5.75%.

The decision on interest rates had been widely anticipated in City circles and it has not had a significant effect on the Footsie, which now stands at 6024.6 after a confident opening to the session by telecom stocks.

Gains on the US markets overnight sparked the sector in London, with mobile phone giant Vodafone among the main beneficiaries, up 9¾p at 212p.

Other risers include Telewest Communications, up 8p at 145p; BT, ahead 22p at 600p; Kingston Communications, up 15¼p to 157½p; Cable & Wireless, ahead 24p at 762p; and Colt Telecom, 5p stronger at £13.10.

However, shares in engineering group GKN have dived by 9% or 75p to 735p following concerns the US slowdown could have a significant impact on its automotive arm. It is the Footsie's biggest faller of the day, despite reporting a 6% rise in operating profits for the last year.

Discount retailer TJ Hughes is also suffering after saying it has made an additional charge of £2.5 million to £3 million against this year's results following the commission of a new management control system. Its share price has fallen by 34% or 111½p to 208½p.

Elsewhere, the insurance sector is under pressure following a difficult set of results from Independent Insurance earlier in the week. Its shares have fallen by 23½p at 165p, while other fallers include Prudential, off 21p at 900p; Royal & Sun Alliance, down 18½p at 483p: and CGNU, off 17p at 952p.

Those firms impressing the City include advertising group Cordiant Communications, which has picked up 5p at 289p after saying it is well positioned to cope with any US economic slowdown.

And bus and rail operator Arriva is ahead a penny at 274p after saying it is expecting strong growth this year.