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London's main benchmark struggled for direction despite bumper annual profits from Lloyds Banking Group Reuters

Blue chip shares struggled for direction despite bumper annual profits from Lloyds Banking Group, which made strides towards putting its payment protection insurance (PPI) legacy behind it.

The lender said its annual pre-tax profits more than doubled to £4.2bn ($5.2bn), after slashing its insurance provisions.

It set aside £1bn for the long-running PPI insurance mis-selling scandal last year, compared to £4bn in 2015. Last year the bank posted a £1.6bn pre-tax profit.

Lloyds also announced a special 0.5p dividend on top of a 2.55p ordinary dividend in respect of 2016 — amounting to a £2.2bn payout. It was the best performer in the top flight, up 4%, or 2.7p to 69.5p.

However, the FTSE 100 Index only edged up seven points to 7281.8 in afternoon trading, after complicated but ultimately downbeat second UK economy estimates from the Office for National Statistics (ONS). The FTSE 250 Index fell 40.8 points to 18731.4.

Gross Domestic Product (GDP) increased by 0.7%, up from 0.6% in the final three months of last year due to better manufacturing data, according to the ONS.

But because other quarters in the year were rounded down, growth in 2016 was revised down to 1.8%, from last month's estimate of 2%. This means the UK can no longer be considered as the best performing large advanced world economy last year.

By comparison, the eurozone grew 1.7%, the US 1.6% and Germany topped the list at 1.9% last year – a five-year high for Europe's largest economy.

Spreadex financial analyst Connor Campbell said: "There was a lot to unpack in this morning's second estimate fourth quarter GDP report, something that has helped dampen the market's good vibes."

The biggest afternoon risers in the FTSE 100 Index were Lloyds Banking Group (+2.7p to 69.5p), Rolls-Royce (+19p to 751.5p), Capita (+12.5p to 546.5p), Barratt Developments (+10.5p to 525p) and Dixons Carphone (+6p to 307p).

The biggest afternoon fallers in the FTSE 100 Index were Anglo American (-53p to 1297.5p), BHP Billiton (-37p to 1368.5p), Antofagasta (-21.5p to 847p), InterContinental Hotels Group (-80p to 3799p) and Rio Tinto (-68p to 3577.5p).

The biggest afternoon risers in the FTSE 250 Index were UBM (+33.5p to 760p), Spire Healthcare (+13.3p to 339.5p), Capital & Counties Properties (+11.4p to 308.6p), Aldermore Group (+8p to 237.5p) and ZPG (+11p to 394.7p).

The biggest afternoon fallers in the FTSE 250 Index were Serco (-22.7p to 125p), Indivior (-22.6p to 347p), Hays (-9p to 148.4p), Vedanta Resources (-43p to 971p) and AO World (-5.5p to 147p).