Shares lose as City frets on rates

SHARES fell for the third successive day today, extending the FTSE 100 slide to 125 points since the Bank of England revealed its unexpectedly hawkish stance on interest rates on Wednesday.

Concerns about a stocks sell-off in the US and Japan pushed European currencies higher, with sterling rising a quarter of a cent to a five-year high of $1.70 against the dollar.

Worries that an imminent increase in British interest rates - possibly in two weeks - could start to choke off consumer and business confidence have put a dampener on the share market.

Some disappointment over American company profits growth has also soured sentiment.

Dealers were anxiously looking ahead to third-quarter GDP figures for Britain due today, the first clues to the most recent performance of the overall economy.

Only a markedly weaker GDP outcome than the expected 0.6% growth figure is likely to prevent a rise in the base rate, analysts said.

The GDP figure is also a test for the Office for National Statistics, whose credibility has been dented by radical revisions to previous figures.

The Footsie was down 13.2 points to 4227 in early trading.