FTSE flat ahead of interest rate announcements

The FTSE 100 makes modest gains ahead of the Bank of England interest rate announcement as investors weigh positive earnings news from insurance groups Aviva and RSA but uninspiring numbers from Barclays.

The FTSE 100 advanced 19 points to 5,405.

Overnight, in the US the Dow Jones Industrial Average had reversed early losses to close 44 points higher at 10,680.

All eyes are now on the Bank of England announcement at midday and the European Central Bank press conference in the early afternoon.

Both are expected to keep interest rates unchanged but comments from ECB President Jean-Claude Trichet will be scoured for signs of a split with the US and the UK where the current focus seems to be on more stimulus.

After some good news on jobs yesterday, investors will be hoping for more good news from the weekly US unemployment claimant figure.

On the company front, insurers Aviva and RSA both traded higher after well-received first half profits. Aviva rose 20.1p to 388p and  RSA added 4.6p to 133.1p.

Fund management group Schroders also advanced after better than hoped for interim numbers. Shares were up 56p at 13.94p.

Barclays reported a better than expected set of first half results but the underlying pre-tax profit disappointed the City as did falling income at its investment banking arm Barclays Capital, pushing its shares down 9.8p to 330.1p

Cobham topped the list of fallers, retreating 11.5p at 228.6p after the aerospace electronics group issued a disappointing outlook statement.