Markets flatline as interest rate decision looms

Global markets were broadly flat as traders sat in anticipation of the latest interest rate decision from the US Federal Reserve.

The London indices were mixed as trader’s cautiously predicted that rates will be held amid expectations the US central bank will maintain loose monetary policy to assist its economic recovery.

The FTSE 100 closed 2.2 points higher at 6,131.46p at the end of trading yesterday.

Connor Campbell, financial analyst at CMC Markets UK, said: “In a decidedly forgettable session, the markets moped about ahead of the month’s Federal Reserve rate vote, statement and press conference.

“It is widely believed that the central bank is still trying to figure out its next step.

“However, the September meeting is looking like the next point of action, so any signal as to what that action might be will be much-welcomed by investors, even if it is just a reiteration of the promise to do whatever it takes.”

The Dow Jones nudged higher as it benefited slightly from the continued retreat of the dollar, which hit a two-year low.

Major European markets were broadly flat, although the French Cac 40 was a rare spark, shooting higher amid improving sentiment.

The German Dax decreased by 0.03%, while the French Cac moved 0.71% lower.

Meanwhile, sterling continued its recent strong spell against the dollar.

The pound rose 0.34% versus the US dollar at 1.297 and was down 0.14% against the euro at 1.102.