THE FTSE 100 Index closed down 24.5 points at 6587.4, shaken by cracks in the Bank of England’s radical new strategy to tie interest rate rises to unemployment.

Official figures showed total unemployment fell by 4,000 in the quarter to June to 2.5 million – with some economists saying the glut of good economic data could mean interest rates rise faster than expected.

Eurasian Natural Resources was among the heaviest fallers after it blamed poor pricing conditions and higher finance costs for the dip in both revenues and profits for the first six months of the year. Its shares closed down three per cent, or 7.2p to 229.3p.

Outside the top tier, shares in pest control firm Rentokil Initial jumped 6.1 per cent after it highlighted an improved profits performance in the second quarter of the year.

With the company no longer saddled with lossmaking parcels arm City Link, adjusted profits improved 11 per cent to £54.8m in the April to June quarter. Shares responded with a rise of 5.95p to 103p.

However, shares in infrastructure firm Balfour Beatty remained under pressure after it reported a big drop in half-year profits, reflecting tough conditions in its UK construction business. The firm reported an overall loss of £6m, down from a £92m profit for the same period last year. Revenues dropped three per cent to £4.97bn. Shares fell 6.7 per cent or 17p to 233.1p as it said trading in some areas of the business remained challenging.

There was also a share price fall for car dealership Lookers, despite a record half-year profit of £28.8m, up 19.5 per cent on a year earlier. It had a 19 per cent increase in new car sales and a 22 per cent rise in used car volumes, but this was offset by tougher trading in aftersales and parts.

Shares were off 4.75p at 123.75p.