1630: Close The FTSE finished down 35.69 points to 6710.45 as Bank of England (BoE) Governor Mark Carney highlighted concerns over the housing market. Carney today appeared before UK lawmakers to discuss last month's half-yearly Financial Stability report, addressing concerns over accelerating house prices in the UK. On interest rates, Carney said he was unsure of the timing of an increase but will be driven by data. In other UK news, inflation rose 1.9% in the year to June from 1.5% in May, surprising analysts who had expected a 1.6% increase. In the US, Federal Reserve Chair Janet Yellen signalled that interest rates will remain low since the US economic recovery is "not yet complete" and too many Americans remain unemployed. Dragging stocks lower on the company front were rivals Imperial Tobacco and British American as investors gave a cool reaction to the planned merger between US peers Reynolds and Lorillard, which involves both UK companies parting ways with a lot of cash.
1537: Federal Reserve Chair Janet Yellen has kicked off her testimony to the Senate Banking Committee, signalling continued low interest rates. She said the US economic recovery is "not yet complete" and too many Americans remain unemployed. Capital Economics said: "[...]Yellen appears in no rush to begin normalising interest rates, even though the pace of employment growth has accelerated and the unemployment rate has fallen to 6.1%. We're not so sure. Survey measures showing that jobs are increasingly hard to fill, which indicates to us that the decline in the unemployment rate does reflect a genuine dwindling of the spare capacity in the labour market."
1531: Lloyds Banking Group is nearing a resolution with British and US regulators over its alleged attempts to manipulate interest rates, according the Wall Street Journal. Settlement talks have accelerated recently, and regulators are hoping to announce a deal in the next few weeks, the paper's sources said.
1507: Manufacturing in the New York region grew in July, data has revealed. The Federal Reserve Bank of New York's general economic index climbed to 25.60 from 19.28 in June, beating the forecast for a drop to 17.
1330: US retail sales rose by just 0.2% in June, below the consensus forecast of 0.6%. However, sales in both April and May were revised to show stronger growth.
1208: US stock futures are pointing to subdued start as investors await earnings from some Wall Street heavyweights, including Goldman Sachs and Johnson & Johnson ahead of the opening bell. Intel and Yahoo! results are due out after market close this evening. JPMorgan has already reported second-quarter figures with earnings and revenues both coming in ahead of forecasts.
1130: Prime Minister David Cameron has demoted Michael Gove as Education Minister, replacing him with Nicky Morgan.
1103: Housebuilders are now among the worst performers in London after a surprise jump in inflation has sparked concerns about a sooner-than-expected rate hike in the UK. David Tinsley from BNP Paribas said: "Overall, some of this upward surprise may be the usual noise from timing and seasonal issues. But it's hard not to conclude that this looks like a good old fashioned UK inflation shock. If it persists in coming months it can only intensify the debate on the MPC." Barratt Developments, Persimmon, Taylor Wimpey and Bovis Homes are all trading in the red.
1000: ZEW's economic sentiment index for Germany fell more than expected in July to 27.1 from 29.8 a month earlier. Analysts had predicted a fall to 28.2. "July's fall in German ZEW investor sentiment adds to signs of a slowdown in the euro-zone's largest and strongest economy," said Capital Economics.
0930: UK inflation grew by 1.9% year-on-year in June, up from 1.5% in May, the Office for National Statistics (ONS) revealed. Economists had expected it to rise 1.6%. The Bank of England is targeting inflation of 2%.
0836: Telecom Plus is a standout performer on the FTSE 350 after the utility supplier said that first-half profits are expected to be "significantly" ahead of last year's and record full-year earnings are on track, as customer numbers rose by 25% in the first quarter. The stock is up nearly 7%.
0832: After an initial fall, UK stocks have pushed into positive territory, helped by decent gains in the banking and mining sectors, as investors await inflation data from the UK this morning and the ZEW surveys in Germany. Defensive stocks in the beverages, food and tobacco industries are leading the fallers this morning in London. The FTSE 100 is up 14 points at 6,760.