Short-term concerns about US equities outweighed some positive British economic news and the FTSE 100 index fell 1.5 per cent.

It was not necessary to consult a highly-paid market strategist to produce a solid analysis of what was going on. The Dow Jones Industrial Average hit 10,000 last week and then took fright. By the London close yesterday, it had rattled all the way back to 9,750, and Footsie followed suit. The British index ended the session 92.3 down at 6,060.5 while the lesser indices, being broadly unaffected by international market moves, trod water. The FTSE 250 dipped 12.8 to 5,475.6 and the SmallCap 4.0 to 2,395.1.

"This is a market that has threats overhanging it," said Mr John Shepperd of Dresdner Kleinwort Benson. "There are still perceptions out there that the US equity market is overvalued and vulnerable and if the US has a setback there are global implications."

The first threat came from Vienna. Agreement by Opec that it would cut daily oil production might be encouraging for strapped oil companies but it could also force higher oil prices and more inflationary pressure.

The second threat is also outside British control. The US Federal Reserve's open market committee, responsible for interest rates, meets next Tuesday and might well take a more aggressive line.