FEARS of a US-led military strike against Syria kept UK blue chips under pressure as the threat of instability in the Middle East also sent oil prices higher.

The FTSE 100 Index closed down 10.9 points at 6430.1. Investors have retreated to safe-haven assets, such as gold and government bonds, amid fears the Middle East tensions have the potential to trigger a major disruption to oil supply, even though Syria is not a major producer.

London Brent oil prices saw their biggest one-day rally in six months and were up another 0.4 per cent to $115.6 (£75) a barrel yesterday, while the price of US crude jumped to its highest level since May 2011 at one stage.

The benchmark New York rate rose to $112.24 (£72) a barrel before falling back to $110 (£71).

Bank of England governor Mark Carney’s first UK public speech helped the pound move higher against most major currencies, except the dollar. He sought to reassure over its forward guidance, confirming interest rates were not likely to be raised for at least three years, while he said more economy boosting measures would be considered if market expectations of rates hindered the recovery.

Banks also rose as Mr Carney unveiled details of a £90bn boost to lending as he said well-capitalised lenders will be allowed to lower their reserves of liquid assets such as cash and bonds.

Royal Bank of Scotland led bank gains up 5.9p to 336p. But fears rising oil prices will reverse recent declines in fuel costs meant British Airways owner International Airlines Group slumped four per cent, or 13.5p to 287p, and easyJet declined 22p to 1212p.

Industrial stocks with a dependency on stable oil prices and global economic conditions also suffered, with Rolls-Royce down 22p to 1092p and car parts firm GKN off 7.3p to 324.1p.

Royal Dutch Shell rose 44p to 2221p, BP lifted 5.6p to 452.7p and exploration firm BG added 57.5p to 1267.5p.

G4S was one of the biggest top flight risers after it unveiled plans to shore up its balance sheet.

The City’s response to the fundraising, involving the sale of new shares and disposal of non-core businesses, was initially lukewarm but shares surged 7.1p higher to 252.4p.