By Simon Falush
LONDON, Oct 7 (Reuters) – Britain's top share index was little changed in early trade on Thursday as stronger pharmaceuticals offset falls in banks, with moves muted as investors awaited interest rate decisions.
By 0816 GMT, the FTSE 100 <.FTSE> was 0.05 percent lower at 5,678.31 points after it gained 0.8 percent on Wednesday, a five month closing high.
The Bank of England is likely to be torn three ways for the first time since November, with dissenting voices arguing between a tighter or looser rate policy due to the highly uncertain economic outlook.
Economists view the tangible outcome of the Monetary Policy Committee's October meeting as inevitable, with all 61 analysts polled by Reuters expect rates to stay at 0.5 percent.
"The decision is a foregone conclusion but people will be looking to see where the MPC (Monetary Policy Committee) is positioned, the ECB will be watched for direction and nonfarm payrolls is also awaited," said Will Hedden, sales trader at IG Index.
Risk-sensitive banks were the biggest drag on the index as investors rotated out of the sector after heavy buying in recent sessions. Barclays
The European Central Bank will also give its latest interest rate decision on Thursday, although again no changes are expected to euro zone monetary policy.
Moves are likely to be relatively muted ahead of nonfarm payrolls on Friday. Economists forecast a fall of 54,000 jobs, but anything much higher than this could trigger a sharp sell-off after recent hefty gains.
HOUSE PRICES SLIP
In a sign that the UK economy is struggling to move into recovery mode, British house prices plunged a record 3.6 percent in September, mortgage lender Halifax said on Thursday. [ID:nLAC005771]
Marks & Spencer
Defensive pharmaceuticals stocks were also higher with Astrazeneca
Ahead of the interest rate decisions, investors' will have British industrial and manufacturing output numbers for August to digest at 0830 GMT, with 0.3 and 0.2 percent monthly gains forecast respectively.
The U.S. data focus will be on the latest weekly jobless numbers, due at 1230 GMT, another indicator for Friday's nonfarm payrolls.
Editing by Hans Peters
Our Standards: The Thomson Reuters Trust Principles.
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By Simon Falush