FTSE loses ground on Carney's forward guidance

The FTSE 100 closed 1.4% down on Wednesday after new Bank of England Governor Mark Carney gave the market forward guidance, but sterling recovered after an initial drop.

On Wednesday, Carney reiterated the Bank would not start tapering its £375bn quantitative easing programme and interest rates would remain at record lows until unemployment dropped to 7%. Currently, unemployment is at 7.8% and Carney does not expect the lower target to be reached for another three years. However, the statement failed to impress investors and the equity market slumped on fears of monetary tightening, with Britain's blue-chip index shedding 1.4% to 6,511. However, sterling rebounded to trade at $1.55 by the end of the day, after falling 0.9% immediately after the sta...