Despite moving higher into mid-day, the FTSE slumped to close 42 points lower on the back of a $2 drop in the price of Crude OIl to $55 and fears of a rate rise. A large part of the decline was attributed to declines in a few stocks, namely, DSG, BP, RDSB, Vodafone and HSBC, which pulled the rest of the market lower later in the day on the back continuing worries about the US Economy. Also many stocks went ex-dividend today which further depressed prices.

Earlier ICI led the advancers, gaining 10%, after announcing the sale of Quest, its flavours and fragrance business, to Givaudan of Switzerland for £1.2 billion. Mining Stock were also strong as metal prices firms. Xstrata rose 2.2% and BHP Billiton 2.5

The latest Bank of England's MPC minutes showed that members voted seven to two in favour of the last hike to 5% which indicates that future decisions are likely to be close with expectations of a further rise by March 07. The minutes showed that those that voted for the rate rise, were nervous about the new year wage round, especially since the Retail Prices Index (RPI) had risen to 3.7% (used as the benchmark for many pay deals)

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