Market dithers as rates hopes fade

The FTSE 100 Index is down 15.9 points to 4080.6 as hopes of a rate cut fade after the publication of details of the Bank of England's interest rate decision.

The Bank's Monetary Policy Committee voted 7-2 in favour of no-change but the verdict was firmer than expected and dented hopes of an earnings-boosting rates cut for firms next month.

Among individual sectors, oil groups are weighing on the market with Shell down 2.75p at 411.25p and BP off 4p at 414.5p while telecoms are also acting as a drag following a tough morning for mmO2.

The former Cellnet business enjoyed a rally yesterday on the back of positive half-year results but is on the back-foot today - falling 3.25p to 50.25p.

Vodafone has also lost some of its shine after a strong run - down 1.25p at 115.25p - while BT Group is 1.75p lower at 212.25p.

J Sainsbury had been one of the session's strongest risers but has eased back as the City digested interim figures. Investors were initially pleased at the results at the top end of forecasts as well as an increased dividend and continued cost savings but the stock has fallen 1.5p at 291.5p.

Another stock issuing results - Land Securities - has managed to hold on to gains and is up 15.5p to 729p after the company remained bullish about its prospects despite flat half-year results.

But Land Securities's rise is overshadowed by Canary Wharf, which has climbed 13p to 262p to top the Footsie risers board.

Among smaller stocks, Fitness First has soared 7.5p to 127p - a 6% gain - after it effectively put itself up for sale.