London close: FTSE finishes higher as BoE keeps interest rates unchanged

The FTSE 100 finished higher on Thursday as the Bank of England decided to keep interest rates unchanged.

The BoE unanimously agreed to maintain rates at 0.5% and leave the asset purchase programme at £375bn, as expected by analysts.

The decision to stand pat on policy comes amid concerns about weak wage growth, low inflation and a global economic slowdown. Political uncertainty surrounding Britain’s 23 June referendum on its European Union membership was also taken into account.

“There appears to be increased uncertainty surrounding the forthcoming referendum on UK membership of the European Union,” the BoE's Monetary Policy Committee said in the minutes of the March meeting.

“That uncertainty is likely to have been a significant driver of the decline in sterling. It may also delay some spending decisions and depress growth of aggregate demand in the near term.”

The decision follows the same path taken by the Federal Reserve and the Bank of Japan this week to stand pat on policy measures.

The Fed said on Wednesday that it now expects to raise rates twice this year compared to December's prediction for four rate hikes.

Elsewhere, the Eurozone’s consumer price index was confirmed at a 0.2% year-on-year fall in February. On the month, however, inflation was revised to 0.2% growth from a previous estimate of 1.4% deflation.

“Price growth has been marginal at best in recent months, and this was likely a factor behind the European Central Bank’s surprise stimulus package last week,” said Dennis de Jong, managing director at UFX.com.

"ECB president Mario Draghi has already significantly scaled back inflation projections, and he’ll be concerned with the prospect that negative interest rates may be required to fend off a slide into deflation.”

Stateside, initial jobless claims rose to 265,000 in the week to 12 March from 258,000 the previous week, the Labor Department revealed. Analysts had pencilled in 268,000 claims.

Manufacturing conditions in the Philadelphia region improved far more than expected in March, turning positive for the first time in seven months, according to the latest report from the Federal Reserve Bank of Philadelphia.

The diffusion index rose from a reading of -2.8 in February to 12.4, by far exceeding economists’ expectations for a reading of -1.7.

Meanwhile, oil prices rallied with Brent crude rising 2.5% to $41.38 per barrel and West Texas Intermediate increasing 3.5% to $39.87 per barrel at 1631 GMT.

In company news, mining stocks including Anglo American, Glencore, Antofagasta, Fresnillo and BHP Billiton were the biggest risers as metal prices surged.

Rio Tinto was also higher after saying chief executive Sam Walsh will retire from the business on 1 July 2016 and will be succeeded by the chief executive of the copper and coal division Jean-Sébastien Jacques.

Barclays shares were in the red, as investing tycoon Terry Smith announced he was suing the bank for "atrocious" customer service, after it failed to complete a £330,000 transfer he was going to use for an investment.

Other banks including HSBC and Royal Bank of Scotland were also under the cosh.

OneSavings Bank surged after saying full year underlying profit before tax was up 52% to £105.9m, and loans and advances grew 31% to £5.1bn.

AG Barr and Britvic slumped after Chancellor George Osborne announced in Wednesday’s Budget that the government will tax soft drinks manufacturers who put large amounts of sugar in their drinks.

Market Movers

FTSE 100 (UKX) 6,188.33 0.21%
FTSE 250 (MCX) 16,827.86 0.45%
techMARK (TASX) 3,072.74 -0.75%

FTSE 100 - Risers

Fresnillo (FRES) 1,007.00p 9.99%
Anglo American (AAL) 540.90p 9.78%
Glencore (GLEN) 158.00p 9.49%
Antofagasta (ANTO) 537.50p 8.28%
BHP Billiton (BLT) 822.00p 7.68%
Randgold Resources Ltd. (RRS) 6,645.00p 7.61%
Rio Tinto (RIO) 2,034.00p 5.42%
Aberdeen Asset Management (ADN) 289.00p 4.45%
Rolls-Royce Holdings (RR.) 701.50p 3.85%
Hikma Pharmaceuticals (HIK) 1,881.00p 3.64%

FTSE 100 - Fallers

Worldpay Group (WI) (WPG) 275.10p -2.48%
Shire Plc (SHP) 3,568.00p -2.38%
Barclays (BARC) 160.60p -2.07%
easyJet (EZJ) 1,485.00p -2.04%
Carnival (CCL) 3,464.00p -1.93%
British American Tobacco (BATS) 4,042.00p -1.82%
HSBC Holdings (HSBA) 449.20p -1.75%
Inmarsat (ISAT) 917.50p -1.61%
InterContinental Hotels Group (IHG) 2,761.00p -1.60%
AstraZeneca (AZN) 3,946.50p -1.46%

FTSE 250 - Risers

OneSavings Bank (OSB) 309.50p 21.75%
Clarkson (CKN) 2,098.00p 10.54%
Evraz (EVR) 86.35p 6.93%
Centamin (DI) (CEY) 97.55p 6.50%
Acacia Mining (ACA) 272.30p 5.62%
Weir Group (WEIR) 1,082.00p 5.56%
Vedanta Resources (VED) 314.90p 5.39%
Marshalls (MSLH) 345.80p 5.11%
Ashmore Group (ASHM) 290.00p 5.07%
Ocado Group (OCDO) 298.40p 4.59%

FTSE 250 - Fallers

Barr (A.G.) (BAG) 512.50p -5.18%
Millennium & Copthorne Hotels (MLC) 399.80p -4.29%
St. Modwen Properties (SMP) 303.70p -3.34%
CLS Holdings (CLI) 1,490.00p -3.31%
Worldwide Healthcare Trust (WWH) 1,663.00p -3.26%
Jimmy Choo (CHOO) 130.90p -3.04%
Mitchells & Butlers (MAB) 266.20p -2.53%
Lookers (LOOK) 162.60p -2.46%
Playtech (PTEC) 814.00p -2.46%
AO World (AO.) 167.10p -2.45%