London close: Stocks flat as BoE warns over Brexit

The FTSE 100 was flat at the closing bell on Thursday after the Bank of England voted unanimously to keep interest rates unchanged, citing concerns about the European Union referendum.

The BoE’s Monetary Policy Committee decided to hold rates at 0.5% for the 85th consecutive month and maintain the asset purchase programme at £375bn, as expected by economists.

The Bank warned that uncertainty over the 23 June referendum on Britain’s membership in the EU could cause economic growth to soften in the first half of 2016. The central bank said the pound had fallen over the past month as a result of the uncertainty.

The BoE’s caution over the EU referendum sent shares in housebuilders into the red including Persimmon, Berkeley Group, Barratt Developments and Taylor Wimpey. The Royal Institute of Chartered Surveyors also said its members predict Britain’s housing market will slow in the lead up to the referendum.

Housebuilder Persimmon was the top faller on the FTSE 100 after reported a slowdown in growth and delays in planning permission for its development sites. The company said forward sales since the beginning of the year were 8% ahead of the same time last year, but it marked an easing on the 12% increase recorded last year.

Another big faller on London’s top tier index was Burberry after the luxury fashion retailer warned profits for 2017 are likely to be around the bottom of the range of analysts' forecasts due to increased investment in the business and a "challenging demand environment".

On the upside, Johnson Matthey was a high riser after Credit Suisse upgraded the stock to ‘outperform’ from ‘neutral’ and lifted the price target to 3,100p from 2,850p.

Broadcaster ITV edged higher amid press reports it is in talks with Entertainment One about a possible takeover, although the Peppa Pig owner said earlier it had not received any approaches. Entertainment One also rallied.

Elsewhere, US inflation unexpectedly slowed in March, according to the Labor Department. The consumer price index rose 0.9% in the year through March, compared to a 1% increase in February and analysts’ forecasts for 1.1% growth.

On the month, CPI rose 0.1% in March, up slightly from the previous month’s 0.2% fall but lower than the 0.2% gain that was expected.

The Federal Reserve, which has a 2% inflation target, is monitoring consumer prices as it determines the timing of its next interest rate hike.

“It was tricky to ascertain investors’ reaction to the CPI reading; initially both the pound and the Dow rose, suggesting the market was happy with the ostensibly hawk-damaging nature of inflation’s relative softness,” said Connor Campbell, financial analyst at Spreadex.

Other data from the Labor Department showed the number of Americans filing for unemployment benefits unexpectedly fell last week, according to the Labor Department.

US initial jobless claims fell by 13,000 to 253,000 from a downwardly-revised 266,000 the week before, beating expectations for a rise to 270,000.

Meanwhile, oil price gained as the International Energy Agency said the global oil glut was set to ease by the end of this year. It also said that any potential agreement to freeze output at the Doha meeting this weekend would have only a limited impact on supplies.

Brent crude rose 0.31% to $44.32 per barrel and West Texas Intermediate increased 0.31% to $41.89 per barrel at 1654 BST.

Market Movers

FTSE 100 (UKX) 6,365.10 0.03%
FTSE 250 (MCX) 17,001.40 -0.27%
techMARK (TASX) 3,181.62 0.16%

FTSE 100 - Risers

BHP Billiton (BLT) 898.50p 1.78%
Johnson Matthey (JMAT) 2,867.00p 1.49%
Mediclinic International (MDC) 966.00p 1.47%
Compass Group (CPG) 1,277.00p 1.35%
Barclays (BARC) 169.00p 1.32%
BAE Systems (BA.) 510.50p 1.29%
Next (NXT) 5,440.00p 1.21%
ITV (ITV) 243.10p 1.21%
Smith & Nephew (SN.) 1,195.00p 1.19%
3i Group (III) 484.50p 1.06%

FTSE 100 - Fallers

Persimmon (PSN) 1,900.00p -5.99%
Barratt Developments (BDEV) 521.00p -3.96%
Berkeley Group Holdings (The) (BKG) 2,976.00p -3.72%
Burberry Group (BRBY) 1,296.00p -3.64%
Standard Life (SL.) 346.70p -3.51%
Intu Properties (INTU) 307.40p -3.33%
Randgold Resources Ltd. (RRS) 6,570.00p -3.03%
ARM Holdings (ARM) 1,007.00p -2.71%
Anglo American (AAL) 690.20p -2.69%
Taylor Wimpey (TW.) 177.00p -2.48%

FTSE 250 - Risers

Entertainment One Limited (ETO) 178.50p 12.55%
Hays (HAS) 133.20p 7.33%
Zoopla Property Group (WI) (ZPLA) 280.90p 6.52%
Evraz (EVR) 126.20p 4.56%
Debenhams (DEB) 80.70p 4.33%
Allied Minds (ALM) 396.80p 4.04%
Aberdeen Asset Management (ADN) 305.30p 3.49%
Melrose Industries (MRO) 370.00p 2.81%
Cairn Energy (CNE) 209.90p 2.74%
PayPoint (PAY) 851.50p 2.59%

FTSE 250 - Fallers

Indivior (INDV) 158.20p -4.81%
Bovis Homes Group (BVS) 842.00p -4.43%
Virgin Money Holdings (UK) (VM.) 341.20p -4.26%
Ted Baker (TED) 2,513.00p -4.19%
Bellway (BWY) 2,367.00p -3.66%
JRP Group (JRP) 133.40p -3.47%
Crest Nicholson Holdings (CRST) 500.50p -3.47%
Pets at Home Group (PETS) 245.70p -3.46%
Circassia Pharmaceuticals (CIR) 261.00p -3.44%
Cranswick (CWK) 2,352.00p -3.01%