A REBOUND in the FTSE 100 Index was choked off as US economic data dragged on the London market.

American services firms grew at their fastest rate in more than eight years last month, but this left traders concerned that the improving economy may force the US Federal Reserve to raise interest rates.

Higher US factory orders in June added to this fear, leaving the FTSE 100 Index just five points higher at 6682.5, though the London market had been more than 28 points higher before the US surveys were released.

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Sterling was higher after stronger-than-expected figures from the UK services sector increased pressure for a rise in interest rates.

The Markit/CIPS services purchasing managers' index registered 59.1 last month, up from 57.7 in June and indicating that overall GDP growth will at least reach 0.8 per cent in the third quarter of this year.

The Bank of England's monetary policy committee is meeting this week amid speculation that the discussions may produce a split vote for the first time since July 2011. The pound was marginally higher against a recently resurgent US dollar at just below 1.69 and 0.3 per cent stronger versus the euro at 1.26.

The strong pound has been a negative factor for many companies in the current round of half-year results, with temporary power firm Aggreko among those affected.

It reported a drop in half-year profits and said the movement in exchange rates in the period reduced revenues by £80 million and trading profit by £23 million in the half year. The company, which has worked on the Commonwealth Games and FIFA World Cup, still saw its shares rise 19p to 1740p as it stuck by expectations for the full year.

Standard Life was another major riser after it posted a 12 per cent jump in half-year operating profits to £339 million as it benefited from a surge in the number of workers being auto-enrolled into company pension schemes. Shares lifted 5.6p to 370p, a 1.5 per cent rise.

In other corporate updates, aerospace components firm Meggitt was almost five per cent lower - off 23.8p to 479.7p - after a "mixed" first half saw revenues fall 11 per cent due to currency pressures. Profits were 21 per cent lower at £143.8 million.

And the recent slide for shares in Royal Mail continued as Credit Suisse cut its target price on the stock to 360p from 460p.

Shares fell 15.2p to 405.5p and have not been as low since Royal Mail was floated in October, when shares were sold at 330p but immediately surged to 450p.

The biggest risers on the FTSE 100 Index were Weir Group up 51p at 2576p, Intertek up 49p at 2755p, St James's Place up 12p at 727.5p and Standard Life up 5.6p at 370p.

The biggest fallers on the FTSE 100 Index were Meggitt down 23.8p at 479.7p, Royal Mail down 15.2p at 405.5p and InterContinental Hotels down 77p at 2288p.