Disappointing news on the US economy dampened the London market's recovery today in the wake of yesterday's near-2% rise.
New official estimates showed the US saw lower-than-expected annualised growth in output in the third quarter, while a lacklustre picture on American consumer confidence also hit optimism.
The FTSE 100 Index lost momentum and closed 31.5 points lower at 5323.9 as Wall Street was also on the back foot.
The Dow Jones Industrial Average declined around 0.5% in early trade.
In London Bank of England Governor Mervyn King told MPs he expected UK output to be below pre-recession levels for the "indefinite future", giving the pound a knock.
Banks were the focus of attention as the Bank also disclosed it made secret loans to Royal Bank of Scotland and HBOS at the height of the financial crisis.
The loans peaked at £61.6bn (€68.22bn) in October last year and were subsequently paid back as the banks moved towards Government aid.
RBS led the fallers today with an almost 4% decline, down 1.495p to 36.305p.
Details of part-nationalised Lloyds Banking Group's record £13.5bn (€15bn) cash call were also released today.
Lloyds - which rescued HBOS but also required taxpayer help - was the top riser, up more than 2%. The bank's shares gained 2.34p to 93.81p after it said it would offer new shares at a hefty 59.5% discount to last night's closing price if the deal gets the go-ahead at Thursday's general meeting.
In the wider market miners lost their lustre after yesterday's steep rises, pushed by a record level for gold price. Randgold Resources was among those heading lower - down 80p to 5040p.
Positive comments from Nomura on the general retailing sector meanwhile helped Marks & Spencer make firm progress, up 7.2p to 388.9p. Argos and Homebase owner Home Retail Group - another stock fancied by Nomura - was 1.9p dearer at 306.8p.
Fashion label Burberry was the victim of a broker downgrade from Morgan Stanley early on and ended the day down 6p at 571p.
Dairy Milk maker Cadbury was also in the red following yesterday's gains seen amid hopes of a bidding battle. Shares dropped 6p to 808p.
Severn Trent meanwhile took the latest turn in a busy week for results for the water sector, adding 7p to 1004p after better than expected pre-tax profits.
The blue-chip firm said it had kept bad debts under control despite the recession, although much will depend on regulator Ofwat's price settlement for the industry due on Thursday.
In the second tier, Durex-to-Scholl footcare firm SSL International added 48p to 720p - around 7% - after strong pre-tax profits in the six months to September as sales of branded goods weathered the recession.
The biggest Footsie risers were Lloyds Banking Group up 2.34p to 93.81p, Invensys up 5.8p to 292.3p, Marks & Spencer up 7.2p at 388.9p and Inmarsat up 12p at 664p.
The biggest Footsie fallers were Royal Bank of Scotland down 1.495p at 36.305p, Thomas Cook down 7.3p at 206.2p, Kazakhmys off 39p at 1281p and Rio Tinto down 93p at 3172p.