The pound faced pressure on Thursday after the Bank of England slashed its growth forecast amid warnings of a sharper-than-expected squeeze on household income.
Sterling dropped nearly a cent against the US dollar and euro at one stage after the Bank nudged down its 2017 growth forecast to 1.9 per cent and said expansion would remain "moderate" following the recent slowdown.
Among stocks, BT was one of the biggest fallers after announcing 4,000 job cuts and a near-halving in quarterly profits, with the wider FTSE 100 Index edging just 1.4 points higher to 7386.6.
There was also little support from across the Atlantic, with the Dow Jones Industrial Average on Wall Street 0.4 per cent lower at the time of close in London.
The focus was on monetary policy in London after the Bank's gloomy consumer spending predictions in its quarterly inflation report.
Sterling was 0.4 per cent lower at 1.29 US dollars and 0.4 per cent lower at 1.19 euros.
The bank, which held interest rates at 0.25 per cent, sought to assure that real wages would start to rise after this year and growth also pick-up, but stressed that this was largely based on a "smooth" Brexit transition.
Oil prices were also at the fore as crude edged up another 1.4 per cent to 50.92 US dollars a barrel, extending gains seen on Wednesday after Iraq and Algeria signalled support to extend Opec production cuts.
