Britain's top shares edged lower on Wednesday as surging oil prices hit firms ranging from British Airways to packaging group Bunzl, although a robust start on Wall Street limited the market's first fall this week.
The FTSE-100 share index closed down 3.5 points at 4,355.2, recovering over 20 points from its morning low after a steady start by US shares and as telecoms stocks pushed ahead.
Volume was low at 1.7 billion shares and the FTSE is struggling to sustain a move in either direction as buoyant oil prices threaten to raise fuel costs and crimp earnings. Crude futures rose above $47 per barrel on Wednesday.
Airline British Airways dropped 2.2 percent on the impact of higher fuel costs and news that workers at its largest union had voted to strike over a pay dispute.
The oil price impact spread further, with packaging group Bunzl down 1.9 percent after Deutsche Bank downgraded it to "sell", citing its exposure to rising input costs.
Household products and food firm Unilever lost 1 percent after Swiss rival Nestle said higher raw material costs had hit profits.
"The problem now with the high oil prices is people aren't trusting the earnings numbers," said Derek Mitchell, director of UK equities at ISIS. "There are going to be a lot of downgrades as a result of the higher oil and electricity prices that companies are going to have difficulty passing on, and that uncertainty is holding things back."
Minutes showing Bank of England members unanimously voted to raise rates by a quarter-point this month had been expected, although there were hints policymakers see a slowing economy.
Services firm Rentokil Initial was the biggest FTSE failure with a 2.2 percent drop after The Financial Times said the company would not recommend a break-up when it outlines an internal review next week. Rentokil declined to comment.
Barclays, Britain's third biggest bank, fell 2.1 percent after it announced it had bought US credit card issuer Juniper Financial for $293 million.
Barclays was also one of 10 blue-chip stocks whose shares traded without the right to the latest dividend payout.
Drinks can firm Rexam topped the FTSE leaderboard with a 1.6 percent rise, helped after ABN Amro, its house broker, said it expected next week's results from the firm to be "pretty solid".
Newspaper publisher Trinity Mirror was a leading mid-cap with a 6.9 percent rise to 659p, after Morgan Stanley repeated its 675p price target on the stock.
Collins Stewart rallied 5.6 percent after Britain's financial regulator cleared the brokerage over allegations of insider trading and financial malpractice.