The FTSE 100 Index dropped 0.1% at 6,867.47, but had earlier plunged 0.3% ahead of an inflation report for May from the Bank of England.
The central bank said that the UK economy continued to solidify but it would take a while before rates could be hiked.
Rate hikes “are expected to be gradual and limited, meaning that bank rates may stay at historical low levels for some time. Outlook for inflation in the medium-term remains benign,” Marketwatch quotes Bank of England Governor Mark Carney as saying.
Carney said that the UK economy is just beginning to revive against the backdrop of the global economic meltdown and a possible rise of interest rates would have to match evolution of the economy.
The British pound lost against the US dollar on the signal that the key UK rate would stay at 0.5% for now.
Stocks of property firm Barratt Developments PLC lost again to 2.3% while Persimmon PLC was down 1.5%. The shares were top climbers on the FTSE 100 in the earlier session.
ITV PLC exerted downward pressure on the FTSE 100, plunging 5.5% after the releasing a trading update.
Compass Group PLC led gainers, ascending 3.1% after the firm that deals in food service said it will repay investors 1 billion pounds or $1.6 billion in a special dividend. Last year’s profits surge following growth in North America and emerging markets.
Mondi Ltd added 3.4% after the maker of packaging material said profit for the first quarter soared 13%, Bloomberg reported.
The FTSE All-Share Index that measures more stocks lost 0.2% as ISEQ Index dropped 0.2% on Wednesday.
Other data showed UK jobless rate slid 6.8% in March, the lowest since 5 years ago. Data from the Office for National Statistics showed average wage surged 1.7% in the first quarter of 2014 from the same period a year earlier.
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