Mark Carney’s statements that the UK economy could withstand a no-deal Brexit saw a rebound in the pound, which weighed down on the FTSE 100, pushing it into the red.
London’s top-flight closed down by 20.87 points at 7,509.82 at the close of trading.
Mark Carney said Britain’s lenders could withstand the worst-case no-deal Brexit and a full-scale global trade war, helping to lift the value of the pound and subsequently weaken the FTSE.
Connor Campbell, financial analyst at Spreadex, said: “Seemingly taking heart from the Bank of England’s claim that there has been ‘some improvement in the preparedness of the UK economy for no-deal Brexit’, the pound rebounded.”
The pound was up 0.33% at 1.255 versus the US dollar, and up 0.26% at 1.114 against the euro.
Fiona Cincotta, senior market analyst at City Index, said: “After spending the morning in positive territory, the FTSE weighed down into the red, struggling under the stronger pound.
“The pound capitalised on the weakness of both the euro and the US dollar, extending gains versus its peers.
“Clearly the case of ‘best of a bad bunch’.”
The Dow Jones opened higher, moving above 27,000 points for the first time ever before sentiment cooled slightly.
The European markets slipped as optimism from Wednesday, when the Federal Reserve suggested lower rates could on the cards, fizzled away.
The German Dax decreased by 0.33%, while the French Cac fell back by 0.28%.
In stocks, household goods giant Reckitt Benckiser saw shares rise after it agreed with US authorities to pay more than £1 billion to resolve an investigation into a former subsidiary’s opioid addiction drug.
The company will pay up to 1.4 billion US dollars (£1.1 billion) as part of an agreement with the US Department of Justice and the Federal Trade Commission to resolve a long-running investigation into how its former subsidiary Indivior marketed the drug Suboxone.
Shares in Reckitt closed up by 162p to 6,590p.
Indivior itself also had a very positive day, as its shares surged higher after it upped its revenue and profit guidance for the year.
The London-based pharmaceutical firm said unexpectedly strong sales of Suboxone buoyed its revenues.
Shares in the company were up 2.98p at 47.28p at the close of trading.
Shares in Land Securities closed lower after its chief executive, Robert Noel, announced plans to retire next year.
Land Securities shares fell by 5p to 832.8p at the end of trading on Thursday.
Furniture retailer DFS saw shares rise after it affirmed its profit outlook, although it also warned of a weaker backdrop due to Brexit uncertainty.
DFS shares closed up 5.5p at 243p.
The price of oil was significantly calmer after Wednesday’s surge in value, moving up just marginally as political tensions relating to Iran continue to play on traders’ minds.
The price of a barrel of Brent crude oil rose by 0.54% to 67 US dollars.
The biggest risers on the FTSE 100 were Barratt Developments, up 30.2p at 614.4p, Reckitt Benckiser, up 162p at 6,590p, DS Smith, up 6.9p at 355.5p, and Tesco, up 4.2p at 241.3p.
The biggest fallers on the FTSE 100 were Ocado, down 75p at 1,140p, Just Eat, down 14.4p at 626.8p, Evraz, down 13.2p at 612p, and Glencore, down 5.15p at 265p.