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(Close): Shares in housebuilders jumped as Bank of England measures to cool the housing market were seen as unlikely to have a major impact.

Bank governor Mark Carney also said that he expected momentum in the market "to continue for the next year or so".

Shares in Persimmon rose 5% and Barratt Developments was up 4.8%

However, the FTSE 100 closed only very slightly higher, up 0.02% at 6,735.12, with sharp falls in two of the largest UK-listed banks weighing on the index.

Shares in Barclays dived 6.5%, making it the day's biggest loser, after the New York attorney general filed a fraud lawsuit against the bank.

The lawsuit alleges the bank misled some investors by falsely telling them it was protecting them from high-frequency traders.

Barclays said it was taking the allegations "very seriously".

Standard Chartered ended the day 4.3% down after the bank said its first-half operating profits would be 20% lower than a year earlier, citing "difficult trading conditions".

Shares in the London Stock Exchange (LSE) jumped 6.1% after it announced it had bought US asset management business Frank Russell for £1.6bn.

The purchase, the largest in the LSE's history, gives the exchange ownership of the Russell 2000 small-cap US stock index and also makes it the third largest player in the growing market for exchange traded funds (ETFs).

Currys owner Dixons Retail and mobile phone retailer Carphone Warehouse both reported strong rises in profits ahead of their planned merger. Dixons shares edged up 0.98% while Carphone Warehouse rose 1.31%.

On the currency markets, the pound edged up 0.18% against the dollar to $1.7013 and climbed 0.3% against the euro to 1.25 euros.