FTSE slips as US bank woes cross Atlantic

Market report Emma Newlands

London’s premier index drifted lower after mixed trading updates from US lenders dealt a blow to British banking stocks.

The FTSE 100 Index slipped 13.91 points to 7,390.22, with Barclays taking a hefty hit after Wall Street titan Goldman Sachs reported flat earnings for the second quarter.

Goldman earned $1.63 billion (£1.25bn), in line with the same period a year earlier, although Bank of America cheered a 10 per cent jump in second-quarter profits. Shares in Barclays were down 4p to 205.1p, while Royal Bank of Scotland fell 2.5p to 250.9p.

On the currency markets, the pound endured a choppy session as it responded to the latest slew of UK inflation data from the Office for National Statistics.

Sterling had pushed to $1.31 in the run-up to the news, but tracked back when the consumer price index measure of inflation unexpectedly slowed to 2.6 per cent in June. Economists had been expecting the cost of living to remain at a near four-year high of 2.9 per cent.

The UK currency was 0.2 per cent lower against the US dollar at $1.302 by the time the London market closed, as traders expect the Bank of England to hold off from an interest rate rise if inflation keeps rolling back. Sterling was also 1.1 per cent lower versus the euro at €1.125.

The biggest risers on the FTSE 100 Index included G4S up 11.3p to 341.1p, British Land Company up 19p to 623p and Associated British Foods up 64p to 2,913p.

The biggest fallers included Experian down 32p to 1,532p, Barclays down 4p to 205.1p, and Wolseley down 65p to 4,600p. The group rose after narrowing the decline in letter deliveries in the three months to 25 June thanks to a boost from general election political mailings. The industrial turnaround specialist fell to the bottom of the mid-cap index after Exane BNP downgraded it to neutral from outperform.