Volume was at 2.5 billion shares traded. Mobile phone operator Vodafone fell 1.8 percent to 151½p when an expected announcement concerning a cash return to shareholders was not forthcoming until interim results are released in November.

Exel gained 0.4 percent to £12.33 on confirmation of a bid worth £3.7 billion from Deutsche Post. In the pharmaceuticals sector, GlaxoSmithKline was up 1.3 percent to £13.80 on the news that its new postmenopausal osteoporosis drug, Bonviva, was approved for market by the European Union.

Crude oil prices that were up substantially helped the oil and gas sector to gains on the day. Oil and gas exploration company Burren Energy added 6.2 percent to 794p on positive interim results and on the news that three of its four wells in a Congo oil field are now online and producing over 52,000 barrels of oil per day.

Oil services group Hunting was up by 1.5 percent to 304½p on rumors that US companies are interested in acquiring it, while Expro International defied trends and lost 3.2 percent to 505p. Elsewhere in the sector, BG Group advanced by 3.1 percent to 539p, and BP and Cairn Energy each gained 1.8 percent, to 665p and £19.14 respectively. Cairn’s share price was an all-time high.

Tobacco stocks were up on the day as analysts expected two US lawsuits against the tobacco industry to be dismissed at the appeals level, potentially leaving the industry less exposed to legal risk with only one major case, by the US Justice Department, still pending against US-linked tobacco companies.

This possibility left BAT up 1.5 percent to £11.72, Gallaher ahead by 1.1 percent to 864p, and Imperial Tobacco with a gain of 0.8 percent to £15.32. In the telecommunications sector, Vodafone advanced by 1.7 percent to 152½p on a positive assessment by Morgan Stanley. Clothing retailer Next added 2.6 percent to £14.90 in anticipation of its interim earnings report.

DSG International, which was previously known as Dixons, gained 1.3 percent to 154½p as Morgan Stanley’s initial assessment of the company gave it a rating of “equalweight” and a price target of 160p.

These predictions are well below the UK government’s forecasts, issued in April, which stand at growth of 3 percent to 3.5 percent in 2005 and 2.25 to 2.75 percent next year.

The CBI is not the only group to cut its growth forecasts for the UK economy. The British Chambers of Commerce said Tuesday that they had cut their estimate of economic growth this year to 2 percent, while the Bank of England issued revised forecasts earlier this month that estimate this year’s UK economic growth at 2 percent and at 2.6 percent in 2006.

These lower forecasts are in line with data released in July by the Office for National Statistics, which said that the Gross Domestic Product had grown by 0.4 percent in the second quarter and by 1.7 percent in the first half. This was the slowest GDP growth since the first quarter of 1993.

The CBI also said Wednesday that business investment growth will only be 1.7 percent this year, less than half of last year’s 3.4 percent growth. Additionally, they said that fixed investment, which includes government investment, would grow by 3 percent this year, less than half of Treasury’s forecast of 6 percent to 6.25 percent growth.

The majority who voted for the rate cut argued that confidence would be damaged if the rate were not cut and that a small action now would eliminate the need for more drastic action later on. The four who voted against the cut, including the Bank’s governor and its executive director, were of the opinion that it was too early to judge that pressures toward inflation had eased.

And, in fact, July’s inflation figures showing that inflation was up to 2.3 percent tended to validate the reasoning of those members of the committee who voted against the rate cut. The vote was the first time the Bank’s governor had been in the minority on a rate decision vote since the monetary policy committee was created in 1997.

The release of the minutes showing the reasoning that led to the rate cut vote sent sterling to its highest level in relation to the euro since July 7. Sterling also gained against the US dollar. The advance of sterling was an indication of the belief that further interest rate cuts will not be forthcoming in the near future.

The decline in London retail sales contributed to a decline of 1.9 percent in retails sales in the UK.

Excluding London sales numbers, sales on like items were flat in the month. While some analysts were pleased that the London figures did not affect UK sales as a whole more than they did, others worried that the full extent of the effect has not been felt yet.

Analysts say that it is not clear yet whether the events of July will lead to a lasting change in buying habits. Some analysts say that losses for central London retailers could translate into gains for retailers, as well as restaurants and leisure activity venues in the suburbs and out of town.

Meanwhile in its quarterly inflation report, the Bank of England’s monetary policy committee does not seem overly concerned about the long-term effects of the July bombings on the UK economy.

The airline hopes to get 31 flights, both short-distance and long-haul, out of the airport by midnight on Friday and then to run 40 percent of its long-haul flights and 50 percent of it’s short-distance flights out of the airport on Saturday. Passengers who did manage to get on BA flights out of Heathrow were given food packages and vouchers by the airline because only drinks would be able to be offered on those flights.

BA flights out of other airports did have catering service. The disruption was made worse because around 1,000 BA employees walked out on Thursday in support of the caterer’s action, and flights resumed after those BA workers returned to their posts.

The disruption of flights affected 40,000 passengers on Thursday and 73,000 passengers on Friday, according to the airline. Analysts said that the cancellations could cost BA tens of millions of pounds, with one analyst estimate said that the disruption could cost the airline 10 million pounds per day during the stoppage and a great deal more in the long-term, depending on how potential customers view the event.

BA, meanwhile, said it was much too soon to say how much the disruption in flights would cost the air carrier.

Life assurers saw advances in share value. South Africa-based life assurers Old Mutual gained 2.5 percent to 134p on better-than expected first half results and a forecast that its strong performance will last through the year. Aviv was up as well, by 2.2 percent to 657p, ahead of its first-half report and on confirmation that Lord Sharman was coming aboard as its new chairman.

Mobile phone company Vodafone gained 0.3 percent on the day to 147p on an assessment by Dresdner Kleinwort Wasserstein that investors were not taking note of rising valuations of Japanese companies and the improvement in Vodafone’s operations in Japan.

Banks didn’t do as well, as Lloyds TSB lost 1.8 percent to 474p, Royal Bank of Scotland dropped 0.9 percent to £16.05, and HBOS was down 0.7 percent to 903 ½p. Other FTSE 100 decliners included oil company BP, which lost 0.8 percent to 653 ½p, pharmaceutical company AstraZeneca, which was down by 0.7 percent to £25.90, and mining company Rio Tinto, which dropped 0.8 percent to £20.32.

Record label EMI, however, gained 3 percent to 254 ¼p on the news that it is in discussions to purchase New York-based independent label Wind-Up Records, which records Creed and Evanescence. The proposed purchase prices is said to be $125 million.

BAA Plc, which operates seven airports including Gatwick and Heathrow, said that passenger traffic grew by 2.6 percent in July compared to the same month last year, to 14.6 million passengers, a new record. The growth came due to the growth of low-cost airlines and recovery in the number of long-haul passengers.

Besides the terrorist attacks, growth was limited due to capacity constraints, especially at Heathrow, which is the world‘s busies international airport. BAA said that passenger traffic was down by 0.6 percent at Heathrow, but it was up by 3.3 percent at Gatwick and by 6.1 percent at Stansted.

Stansted is a base of operations for two low-cost air carriers, Ryanair and easyJet. Further, BAA said that all markets except for the European charter sector showed rises in passenger traffic. North Atlantic traffic was up by 1 percent, and other long-haul traffic rose by 7.5 percent in July.

As reported, official data shows a rise of 15 percent in UK exports to non-European Union countries between May and June. This dropped the goods trade deficit to £1.4 billion.

Exports of goods to Europe were also up, by 2 percent, but the trade deficit in goods sold to European countries actually grew slightly, to £2.8 billion in June from £2.7 billion in May.

The issue that is of concern to the ONS is the practice of some to reclaim VAT on small items of relatively high value such as computer chips or mobile phones, saying that the goods will be exported.

This “missing trader fraud”, as it is known, tends to artificially inflate data on exports. The ONS, along with Revenue and Customs, are currently investigating whether this sort of activity is going on within the European Union.

A spokesman for the ONS said that while that office does not know just yet exactly what is going on or how widespread the fraud might be, it was decided that it would be prudent to announce that the currently reported figures are not certain.

If the new vaccine is successful it would be a significant breakthrough at a time when health care officials are increasingly worried that a flu pandemic could spread globally, especially in light of the emerging problem of bird flu spreading to humans.

Such a vaccine would be especially important because of the current long delays in developing vaccines when new strains of flu emerge. Acambis is working with Flanders Interuniversity Institute for Biotechnology, a Belgian research center, in the development and licensing of the vaccine.

This is the second bit of good news from Acambis in two weeks. The company said recently that it has a vaccine in trials that could prove to be the first effective treatment for clostridium difficile, a new “super bug” that has been seen in outbreaks in 15 UK hospitals.