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The FTSE 100 closed little changed on Thursday as positive company news and results offset mostly negative US and European economic figures signalling the potential for interest rates to rise.
The index outperformed both Germany's DAX and France's CAC 40, which ended down about 1 percent on expectations the European Central Bank will raise interest rates again next month.
Worries over the US economy also increased after US government data showed business productivity had unexpectedly delivered no growth in the third quarter and that unit labour costs, an inflation measure, rose more than expected.
The FTSE 100 closed down 0.3 points at 6,149.3.
Traders said the focus would be on the October US non-farm payrolls report due on Friday for more clues about the direction of Federal Reserve interest rates.
"This was very much a day where people were going to sit on their hands if they possibly could and wait for tomorrow's payroll results," said Neil Parker, a market strategist at the Royal Bank of Scotland.
"It will set the direction for the interest rate markets, and as a consequence there will be a knock-on effect on the equity markets," he added.
Heightened concerns over a US economic slowdown meant that banking stocks suffered. Barclays was down 0.9 percent, and Royal Bank of Scotland lost 0.8 percent.
Pharmaceuticals were the standout gainers, benefiting from a report that showed global sales rose 5 percent in the 12 months to August. GlaxoSmithKline was up 1.5 percent, gaining from a J.P. Morgan upgrade. AstraZeneca tacked on 1.5 percent.
Power generator British Energy climbed 4.3 percent, with traders citing a report in the Financial Times that the International Energy Agency would urge governments next week to help speed up the construction of new nuclear power plants.
"It's good news for British Energy. We'll probably see them back up to 470 pence before they pause for breath; they've been oversold," a trader said.
Consumer goods giant Unilever topped the FTSE 100 leaderboard, up 4.6 percent after it reported a rise in third-quarter sales, at the high end of analysts' estimates, and said a share buyback programme of 1.5 billion euros was planned to start in 2007.
Pub group Enterprise Inns ticked up 1 percent amid heavy volumes with traders citing a feel-good factor from a better-than-expected result from mid-cap rival JD Wetherspoon. "I think it's directly related to the Wetherspoon like for likes," a trader said.FTSE 250 member Wetherspoon was up 4.2 percent after reporting a 9 percent jump in first-quarter sales, including a 5.2 percent rise in like-for-like sales in Scotland following a smoking ban. Punch Taverns was up 2.2 percent.
With weak copper prices recovering slightly from earlier losses, mining stocks featured among the downside. Antofagasta was down 1.3 percent and BHP Billiton down 0.9 percent.
Xstrata also fell 0.9 percent after it completed the acquisition of Canadian miner Falconbridge.
US crude oil prices continued to slip down to $58 a barrel amid ample US fuel stocks and the restart of two Nigerian oil installations shut down last week after an attack by local villagers.
BP was steady and Royal Dutch Shell slipped 0.3 percent.
Other stocks that featured on the downside, included Smith & Nephew falling 4.2 percent, after it said it had held preliminary talks over a tie-up with US rival Biomet Inc as it met forecasts for third-quarter earnings.
Among other midcaps, food equipment maker Enodis jumped 6.7 percent on bid speculation. Stove maker AGA Foodservice Group later said Enodis had rejected its approaches but that it was continuing to seek further discussions. AGA closed up 0.1 percent.

Copyright Reuters, 2006

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