Retreating from Tuesday's two-month high, the top index in London fell on Wednesday as mining companies faced a rough afternoon and traders waited on news from the US Federal Reserve.

The FTSE 100 lost 0.6% of its value, dropping 40.94 points to end the day at 6,762.67.

It comes as traders waited for a statement from Jerome Powell, the chairman of the US Fed on Wednesday evening.

Experts on Wall Street are worrying that a faster-than-expected economic recovery could push up prices. The idea is that as Americans get vaccinated and restrictions lift they will flock to restaurants and other services they have been denied for months.

The spike in demand might lead to price inflation, helping to push up the yield of government bonds.

It is the headache that Mr Powell faces. In the face of rising inflation, there is speculation the Fed might up its base rate earlier than current 2024 predictions, or slow bond purchases.

"Equity markets in Europe have been quiet today as traders are content to sit on their hands ahead of the announcement," said CMC Markets analyst David Madden.

He added: "An increase in yields usually sparks conversations about hiking interest rates, but for now the Fed wants to leave rates near zero until 2024.

"Jerome Powell, the Fed chair, won't want to talk about tightening policy just because yields are rising so he is likely to point out the unemployment rate is still way above the Fed's target, so the policy will have to remain very loose, even if that means enduring some inflationary pressure in the near-term."

Sterling dropped 0.1% against two major international currencies. By the end of the day £1 could buy 1.3876 dollars or 1.1659 euros.

Though markets were subdued across the world, the FTSE was a poor performer among US and European indexes.

Its 0.6% drop was worse than the 0.5% fall in New York's S&P 500, and also much below the Dow Jones, which rose 0.2%, the Cac in Paris, which was flat, and the Dax in Frankfurt, up 0.3%.

It was in no small part London's miners that kept the index from doing better. The 20 stocks that struggled the most on the index on Wednesday included BHP, Fresnillo, Rio Tinto, Evraz and Anglo American.

Its losers also included Ocado, which is set to update markets on Thursday morning.

Also in the red was SSP, shares down 7.9%, as Upper Crust's owner, which has struggled during the pandemic, said that it will raise £475 million from shareholders.

Just Eat Takeaway closed down 2.7% as it revealed chief executive Jitse Groen was handed a nearly 58% rise.

Serco was up 1.5% after winning a deal to run services for a Canadian military base worth up to £870m. Capita rose 1.7% after revealing a cut in pre-tax losses from £62.6m in 2019 to £49.4m in 2020.

Funeral provider Dignity rose 6.4% after underlying pre-tax profits did not do as badly as expected last year. Profits fell 19% to £30.7m.

The biggest risers on the FTSE 100 were BT, up 9.3p to 152.5p, Rolls-Royce, up 4.35p to 127.2p, Intertek, up 132p to 5,602p, BAT, up 60.5p to 2,750.5p, and Standard Chartered, up 9.3p to 500.6p.

The biggest fallers on the FTSE 100 were Ocado, down 106p to 2,083p, M&G, down 9.1p to 214.1p, Anglo American, down 118.5p to 2,889.5p, Evraz, down 21.6p to 540.2p, and Legal & General, down 10.2p to 281.1p.