News of the Bank of England's decision to hold rates at current levels failed to inspire a London market caught in the midst of a sell-off of the telecoms sector and renewed fears on US interest rates.

The decline saw the index test the 6,000 level, a four-and-a half month low.

There was not a single speck of blue on dealers' screens opened on the telecoms pages and, not surprisingly, the biggest impact came from the two biggest stocks, British Telecommunications and Vodafone AirTouch. Sharp retreats were also recorded in other leading Footsie constituents such as Colt Telecom which fell by 9 per cent and Telewest Communications which reported increased losses yesterday.

Profit-taking was also evident in the FTSE 250 which closed 38.4 down at 5,976 and in the SmallCap.