The FT-SE 100 index of leading shares fell by 0.48 per cent, or 31.5 points, to 6,520.9 points. In Frankfurt, the X-DAX index opened 0.58 per cent lower at 5,436.72 points and in Paris, the CAC 40 index was showing a loss of 0.8 percent mid-morning at 4,501.44 points.

Dealers said that the markets were awaiting the next monetary policy meeting of the US Fed board next week. Some economists predicted that the cost of borrowing would be raised in the United States. This often hits share prices, to the benefit of currency.

London shares did not react to figures showing a widening of the British trade gap, nor to the minutes ofthe latest monetary policy meeting held by the Bank of England. Shares in Lloyds TSB bank rose by 10 pence to 934.5 pence after the bank said it would pay seven billion pounds ($11.2 billion, 10.5 billion euros) for the mutually-owned pensions company Scottish Widows.Shares in Hyder utility group fell by 3.5 pence to 752.5 pence after British Energy said it planned to buy the Welsh group's gas and electricity distribution arm for 105 million pounds. British Energy stock remained unchanged at 519.5 pence.