Economics / Markets

Shares on London's blue chip index fell by 1.5% as yet more dismal financial news weighed on the market, and concerns grew about the still-rising price of oil.

The FTSE100 is on a downward slide this morning despite a positive opening, with downgrades denting a fine Friday start for homebuilders. The index is currently 11 points (0.19%) behind to 5697.40.

HBOS, Royal Bank of Scotland and Alliance & Leicester led the decliners in London on Thursday, as yet more fresh gloom about the UK housing market contributed to a 48.45-point, 0.8% fall in the blue chip FTSE 100 index.

Sir John Gieve is to resign as deputy governor of the Bank of England, while Charles Bean will take up a new role as deputy governor for monetary stability.

London markets have opened relatively steady this morning despite losses on Wall Street and a strong sell-off in Asia. The FTSE100 is currently 9.50 points (0.17%) lower to 5747.40.

The FTSE 100 closed 1.8% lower on Wednesday, though slightly above earlier lows, as shares in retailers, banks and housebuilder Persimmon fell.

Over a third (36pc) of the FTSE-100's market capitalisation is now comprised of commodity related companies, up from 26pc last year, according to DigitalLook.com.

London markets have started poorly this morning as a host of downgrades punished blue chip stocks in early trading. The FTSE100 is currently 43.40 points (0.74%) lower to 5818.50.

The FTSE 100 rose 1.1% on Tuesday, adding 67.34 points to close at 5,861.9, boosted by such major miners as Eurasian Natural Resources , which led the gainers with a 6.2% gain, Lonmin , up 4.4%, and Anglo American , 4% higher.

The rate of inflation rose further in May, according to the Office for National Statistics (ONS).