London shares drifted lower in early trading, as dealers and investors waited nervously for the Bank of England's decision on UK interest rates.

Interest rates are expected to be cut by 0.25% to 7%, although some analysts are looking for a larger fall.

By 0910 GMT the FTSE has slipped 31.8 points to 5591.

A poor showing on European markets also contributed to the fall.

Japanese shares fell 1.3% and the Hong Kong market ended 2.7% down.

Poor results from Royal Sun Alliance knocked insurance stocks.

Shares in First Leisure, the entertainment group run by former media mogul Michael Grade, perked up on news that its its health business was performing well, despite a sales fall at its nightclubs and bars division.

Railtrack's shares were unchanged at £15.91 in early trading. The company announced a better than expected rise in pre-tax profits, and insisted it was making good progress with its £17bn investment programme.

Shares in pub group Yates Brothers slipped despite the group announcing an improvement in profits.