FTSE slips as rate cut fails to inspire

By Rebekah Curtis

LONDON (Reuters) - The FTSE 100 .FTSE ended a volatile session slightly lower on Thursday as investors digested a 100-basis point cut in interest rates and losses in miners eclipsed stronger oils.

The benchmark share index closed down 6.35 points, or 0.2 percent, at 4,163.61 points, having whipsawed in a trading range of 4,090 and 4,261 points.

The Bank of England slashed borrowing costs by a full percentage point to shore up Britain's deteriorating economy and stave off the threat of deflation.

The central bank warned further measures would be required to hold the economy back from plunging into deep recession.

The European Central Bank cut interest rates a record 75 basis points to 2.50 percent and forecast the euro zone would stay in recession next year.

Among banks, HBOS HBOS.L added 7.4 percent, HSBC (HSBA.L) gained 1.7 percent and Royal Bank of Scotland (RBS.L) also rose. But Lloyds TSB (LLOY.L), Barclays (BARC.L) and Standard Chartered (STAN.L) all closed lower.

"While banks have had a decent run today, I'm not sure it's something that's going to continue for much longer," said Peter Dixon, an economist at Commerzbank. "The macro environment in which were trading is, frankly, dire," he said.

"There are concerns that even though the central banks around the world are finally getting the bit between their teeth and they're starting to cut rates, it isn't enough to prevent what is going to be quite a major slowdown, and that's going to have a major impact on profitability next year."