Signs that the Bank of England will push the button on more economy boosting measures ensured the pound endured another punishing session.

The minutes of this month's interest rate meeting revealed an unexpected split, with Bank governor Sir Mervyn King and two other policymakers wanting to extend quantitative easing by another £25 billion to £400 billion.

While they were outvoted, the effect on the already weakening pound was noticeable, with sterling hitting a fresh eight-month low of 1.529 US dollars and falling nearly 1% to 1.15 euros.

Loading article content

The FTSE 100 Index was buoyed by the prospect of further stimulus measures this spring, with the top flight bucking falls in Europe and on Wall Street – up 16.3 points to a fresh five-year high of 6395.4.

This was despite a big disappointment for investors in RSA Insurance after the More Than owner slashed its full-year dividend payment by one-third.

The company said the decision to re-base its dividend was a prudent move that reflected the impact of falling bond yields on investment returns and its desire to focus on growth opportunities going forward.

RSA shares dived 14% or 19.3p to 117p after the 33% cut in its annual dividend to 3.9p a share. Other insurers were also affected, with Aviva off 15.2p at 354p and specialist insurance underwriter Catlin down 22.5p to 503p in the FTSE 250 Index.

Elsewhere, Vodafone steadied after yesterday's 2% slide but the mobile phone giant's shares failed to kick on after Ofcom's cheaper-than-expected £2.3bn auction of 4G airwaves.

Vodafone paid £790m to secure a mix of higher frequency 2.6 GHz and lower frequency 800 MHz bands, giving its superfast network "strength and depth".

But with fears over its exposure to battered European markets still lingering, its shares were 1p lower at 162.5p. Drinks can maker Rexam topped the FTSE 100 risers board after posting higher profits, up 1% on an underlying basis to £418m, and boosting its dividend.

Shares in the firm lifted 5% or 25.3p to 502p.

In the FTSE 250 Index, building supplies firm Travis Perkins upped its dividend by 25% and met City expectations with full-year profits of £313.3m.

However, analysts were more interested in a 5.1% fall in like-for-like sales for the first seven weeks of 2013, although the Wickes owner pointed to poor weather conditions and comparisons with strong trading a year earlier.

Shares in the company were 37p lower at 1271p, which is a drop of 3%.