FTSE falls on gloomy Fed forecast

The FTSE has opened in negative territory after a gloomy assessment of the US economy pushed European shares lower.

Shortly after opening, London's leading index was down 0.8%, or 46 points, to 5726 as investors took stock of US Federal Reserve chairman Ben Bernanke's warnings over the state of the US economy. The Fed scaled down its growth forecast from between 3.1%-3.3% to 2.7% and 2.9%.

Part-nationalised banks RBS and Lloyds feature amongst the morning's losers, both down around 2%, after deputy prime Minister Nick Clegg backed proposals to give the public shares in the banks. Barclays, too, is 1.9% off the mark.

Miners Vedanta Resources and Kazakhmys complete the losers board, down 2.9% and 1.8% respectively.

British Sky Broadcasting, up 1.2%, is the morning's biggest winner with insurer Aviva and banking giant HSBC also enjoying early gains.

The FTSE's losses are mirrored throughout Europe, with France's Cac 40 and Germany's Dax both down around 0.8%.