The FTSE 100 edged down with trading subdued as the US was closed for business because of a public holiday.
Investors remained glued to the crisis in the banking sector with former Barclays chief Bob Diamond, who quit over the bank's rate fixing scandal, prepared to be grilled by MPs today.
Meanwhile Britain's service sector grew at a much weaker pace than expected last month despite firms cutting prices and running down existing orders, a business survey showed.
The Markit/CIPS purchasing managers' index (PMI) for the services sector, which accounts for around three quarters of output, sank to an eight-month low of 51.3 in June, below May's 53.3 and well shy of expectations for a more moderate easing to 52.8.
On London's blue chip index Interdealer broker ICAP was the heaviest faller early on, dipping by more than 3.5 per cent.
Tullow Oil was off by more than two per cent despite saying it was on track for record first half revenues.
It was a weak start to trading in the oil sector with BP retreating by 1.7 per cent.
Babcock, which is an engineer specialising in the defence sector, was down by just over two per cent.
Insurer Aviva was off by just over one per cent, reversing some recent gains.
Barclays was down more than one per cent as Diamond prepared to give his version of events surrounding the manipulation of Libor rates to parliament.
Lloyds was down 0.8 per cent while RBS - which has been dented by a computer blunder affecting thousands of customers - lost more than two per cent.
On the up side commodities giant Glencore - which is trying to seal a merger deal with Xstrata - was the biggest climber on the blue chip index with a rise of 1.3 per cent. Xstrata was the second highest riser, up 1.2 per cent.
Vodafone edged up by 0.7 per cent while cruise ship giant Carnival also lifted by the same level.
Sweeteners company Tate & Lyle also edged up 0.7 per cent.
US markets are today closed for the Independence Day holiday.
In Asia the Nikkei closed up 0.4 per cent and the Hang Seng down 0.1 per cent.
City A.M. Reporter