The US Federal Reserve had been expected to announce plans to reduce its massive asset purchase progamme by around $10 billion (£6.3bn). This would have marked the first shift in the direction of policy since it last raised interest rates in 2006.
A move to taper quantitative easing (QE) had largely been factored in across global markets, but the FTSE 100 Index dipped 11.4 points to 6558.8 on concerns over how tight the policy squeeze could be.
UK central bank policy was also in sharp focus following the release of the Bank of England's September rates meeting, which revealed a growth forecast upgrade for the third quarter. The minutes showed the Bank expected GDP to grow by 0.7% in the third quarter, up from a 0.5% estimate given in its August forecast.
Members of the Monetary Policy Committee also voted unanimously to hold its money-printing drive steady at £375bn.
Britain's rosier economic outlook helped the pound move higher against most major currencies, hitting a new nine-month high at $1.60 and €1.20.
Among stocks, Barclays was the biggest faller in the top flight as new shareholders will no longer be entitled to take part in the bank's forthcoming £5.8bn rights issue. Shares were 7% lower, off 21.8p at 277.2p.
Lloyds Banking Group recovered from Tuesday's falls in the wake of the Government's move to sell a 6% stake in the lender.
The taxpayer-backed group saw shares rise 2% or 1.6p to 76.3p, while fellow part-nationalised lender Royal Bank of Scotland was also ahead, up 3p to 365.5p, following declines yesterday after a broker downgrade.
Airport scanners-to-medical devices firm Smiths was the second-biggest riser in the top flight after it announced a special dividend totalling £118 million after struggling to find suitable acquisition targets.
The group said its cash flows were "more than adequate" to meet its needs as it released a 30p per share windfall, on top of a 39.5p total dividend.
With pre-tax profits for the year to July 31 holding firm at £498 million, the group's shares surged by 3% or 36p to 1412p.
Meanwhile, housebuilder Redrow was near the top of the FTSE 250 Index risers board, up 5.7p to 236.5p, after it reported a 63% rise in full-year profits and announced plans to rekindle shareholder dividend payments.
The biggest risers on the FTSE 100 were Arm Holdings up 30.5p to 984p, Smiths Group up 36p to 1412p, Lloyds Banking Group 1.6p higher at 76.3p and Tesco 6.9p stronger at 378.5p.
The biggest fallers on the FTSE 100 were Barclays 21.8p lower at 277.2p, Aberdeen Asset Management down 13.2p to 367.3p, Fresnillo 33p weaker at 1008p and Persimmon down 34p to 1112p.