Finance: The FTSE 100 is diving after the Bank of England signalled a rate hike may be on its way

Five members of the bank's MPC voted to leave rates on hold, while three voted for a hike.

European markets are diving sharply on Thursday afternoon after the Bank of England held interest rates but made clear that a hike could be on its way soon.

In Britain, the FTSE 100 has dropped more than 1.1% on the day, losing ground in morning trade before diving once again after the BoE's announcement.

Here is the chart:

The index's biggest fallers include housebuilder Persimmon Homes (down 6.6%), as well as commodity stocks Anglo American and Fresnillo (5.4% and 4.9% lower respectively).

Many of the other European markets have suffered similar losses, with the French CAC 40 and IBEX 35 dropping by 1.02% and 1.19% respectively. The German DAX, meanwhile, saw a more moderate drop of 0.96%.

Here is the scoreboard:

"Equity indices have erased most of this week's gains to test major support. A stronger USD following a Fed interest rate rise would normally help the FTSE and DAX via GBP and EUR weakness," Mike van Dulken, head of research at Accendo Markets writes in an emailed statement.

"Not today though as poor UK retail sales (and a sector profits warning) weigh more heavily, along with continued Fed-ECB policy divergence, a drop in continental exports and differing transatlantic growth prospects."

Five members of the bank's MPC voted to leave rates on hold, while three voted for a hike. Read Full Story