Mid morning and the FTSE is trading in a narrow range ahead of key UK and EU rate decisions, and following Portugal’s decision to seek a bailout.

The FTSE has started the day broadly flat, trading in a very tight 13-point range, as news of Portugal’s fall failed to make any market waves. Investors have seen Portugal as Europe’s dead man walking for weeks now, with any potential rescue package already firmly priced in. Confirmation of the bailout will now turn the heat up on Spain, who must try to disengage from the fallen peripheral states. Banks have generally taken the news positively, with RBS heading the blue-chips with gains of 2.1%. At the deep end, Cairn Energy is down 2.1% after the deadline for a deal with Vedanta Resources for Cairn’s India assets was pushed back to 20 May.

The general mood on London’s trading floors has been cautious ahead of this morning’s twin interest rate decisions from the UK and Europe. While domestic rates are likely to hold firm at 0.5%, every economist worth their salt has predicted an imminent hike from the ECB. The scale of the rise is very much a matter of debate, however, with forecasted increases ranging from 0.25% to 1.25%. The consensus remains for a conservative hike of 0.25%. Looking ahead to the US, and on a quiet day, Wall Street may well take some direction from the events in Europe. However, initial jobless claims figures at 1.30pm and February consumer credit at 8.00pm, will give US traders some all American news to get
 their teeth into.