Ftse: 4,288.33 (+11) at 11.34am:Britain's top share index ticked up by midday ahead of the US Federal Reserve's rate decision, as defensive drugmakers rose but HSBC fell on fundraising fears and soft metal prices hurt miners.

Drugmakers GlaxoSmithKline, AstraZeneca and Shire were up between 2.2 and 3.3 per cent.

By 11.34am, the FTSE 100 was up 10.93 points at 4,288.33 after trading as low as 4,246.10 to as high as 4,329.62 earlier in the session.

"There is no real news today to drive the market one way or another. We are still reeling from the Madoff situation," said David Buik, strategist at BGC Partners.

"People are obviously very concerned that ... deflation is a distinct possibility," Mr Buik said. "We are waiting to find whether it is 50 or 75 basis points (rate cut by the Fed) today."

Banking giant HSBC shed 3.1 per cent as talk swirled it could have to raise up to $14 billion to rebuild capital, dealers said. HSBC declined to comment.

Standard Chartered and Royal Bank of Scotland were also weak. But Barclays, HBOS and Lloyds TSB were up between 0.4 and 3.9 per cent, ahead of the release of Goldman Sachs quarterly results later in the day.

The US bank is expected to report a quarterly loss of as much as $2.5 billion, hit by the falling value of many of its investment.

The US Federal Reserve is widely expected to cut interest rates to just 0.5 per cent or lower after the European market close. Fed fund futures showed a 64 per cent chance of a 75 basis point cut to 0.25 per cent.

In the UK, Bank of England Governor Mervyn King said inflation could fall below 1 per cent next year.

Inflation eased to 4.1 per cent in November from 4.5 per cent in October but that is still well above the government's 2 per cent target and required King to explain what action the BoE plans to take to bring it back on track.

Miners were other underperformers, tracking weaker metal prices. BHP Billiton, Rio Tinto, Vedanta Resources, Lonmin and Antofagasta dropped between 5.2 and 6.6 per cent.