FTSE dips on US deficit talks

FINANCIALS led Britain’s topshare index lower yesterday, on concerns that deeply-divided US lawmakers would fail to agree to a deal to avoid a default on the country’s debts.

The UK benchmark index closed 73.15 points, or 1.2 per cent lower at 5,856.58, albeit in thin volumes.

The continued standoff by US politicians has prompted fund managers to steer clear of equities.

Republican and Democratic leaders are scrambling to find common ground before 2 August, when the government is expected to hit its $14.3 trillion (£8.72 trillion) borrowing limit that could trigger a default and roil world markets.

“Points scoring by politicos means many in the market are reluctant to take a view until the issue is resolved either way,” Darren Sinden, a trader at Silverwind Securities, said.

A vote on a deficit plan by Republican Speaker John Boehner was pushed back to today from yesterday.