The FTSE 100 was flat after optimism from strong results from Apple in the US fell away with GDP data showing that Britain is on the brink of recession.
Later today the Fed will announce its interest rate decision after the European markets close, with no change expected to the US central bank's 0.25 per cent rate.
That was seen as a positive but Greek debt woes also cast a shadow as European markets began to sag.
Official figures showing that the UK economy shrank by 0.2 per cent in the last three months of 2011, raised the spectre of a renewed recession.
In London Scottish and Southern Energy, off by 2.5 per cent, was the steepest faller in early trading.
RBS lost 2.4 per cent and Asia-focused Standard Chartered 1.1 per cent. Also in the banking sector Barclays was 0.4 per cent down.
The world largest caterer, Compass, nudged down by 1.4 per cent.
On the up side fund manager Ashmore was up 6.8 per cent, making it the highest riser on the FTSE 100.
iPhone chip maker Arm Holdings edged up by 3.8 per cent.
Engineers Weir and IMI also lifted after recent dips in their price with both up more than 2.5 per cent.
Miner Evraz was up 2.2 per cent, making it the top gainer in the sector.
Meanwhile FTSE 250-listed WH Smith was up over three per cent after reporting that its sales were falling at a slower pace than previously.
In Asia the Nikkei closed up 1.1 per cent and the Hang Seng 0.8 per cent.
Investors there were coming to terms with the news that Japan had fallen into a trade deficit for the first time since 1980.