European stock markets fell on Wednesday with investor focus on Britain after the country reported a bigger-than-expected drop to unemployment. London's FTSE 100 index of top companies dropped 0.13 percent to stand at 6,825.66 points in midday deals. Frankfurt's DAX 30 index slipped 0.23 percent to 9,707.43 points and in Paris, the CAC 40 index fell also by 0.23 percent to 4,337.62 points compared with Tuesday's closing values. The euro fell against the dollar and British pound. "The FTSE is now entering the twilight zone where good news is bad news, as the surprise drop in unemployment has triggered fears the Bank of England will increase rates sooner than expected," said David Madden, market analyst at IG traders. Britain's unemployment dropped faster-than-expected to a rate of 7.1 percent in the three months to the end of November, official data showed on Wednesday, further highlighting the nation's economic recovery. It fell from a rate of 7.4 percent in the quarter through to the end of October, the Office for National Statistics (ONS) said in a statement. That was the lowest level for nearly five years, or since it stood at 6.8 percent in February 2009. The Bank of England, under governor Mark Carney, has stated that it will consider raising its key interest rate from a record-low 0.50 percent once the unemployment rate falls to seven percent. In foreign exchange activity on Wednesday, the European single currency dropped to $1.3538 from $1.3559 late on Tuesday in New York. The euro fell to 81.88 pence from 82.29 pence on Tuesday, while the pound climbed to $1.6535 from $1.6476. Gold prices increased to $1,239.49 an ounce from $1,238 Tuesday on the London Bullion Market. Asian markets closed mostly higher on Wednesday, with Tokyo reversing early losses after the Bank of Japan said it was winning the war against deflation and delayed injecting fresh stimulus into Asia's number two economy. The yen saw a brief rally before easing again after Japan's central bank decided to refrain from adding to its already-huge asset buying programme following a two-day policy meeting. US stocks ended on Tuesday in mixed fashion after a stream of generally lacklustre earnings reports and a modest upgrade to the International Monetary Fund's economic forecast. The IMF raised its estimate for world economic growth in 2014 by a tenth of a point to 3.7 percent. The IMF said the global economic recovery is strengthening. At the same time, the Fund said, the rebound in advanced economies is uneven and it warned of the threat of deflation.