London midday: Stocks rise as BoE keeps policy unchanged

London stocks recovered from earlier losses on Thursday as the Bank of England decided to keep policy measures unchanged.

The BoE voted unanimously to leave interest rates at 0.25% and the asset purchase programme at £435bn, in a move expected by analysts.

Last month the BoE cut rates for the first time since 2009, by 25 basis points, and embarked on an additional £70bn of asset purchases.

In other UK news, official data showed UK retail sales fell less than expected in August. Sales dropped 0.2% on a monthly basis, better than the 0.4% decline forecast by the economists but a sizeable slowdown after a strong July, where sales have been revised up from 1.4% to 1.9%.

The annual rate of growth slowed slightly to 6.2% from a revised 6.3% but was much higher than the estimated 5.4%.

Capital Economics' UK economist Paul Hollingsworth said despite August’s dip, spending on the high street "is still going gangbusters" although he expects some moderation over the next few quarters.

"Admittedly, some slowdown in the pace of spending growth looks likely. While the survey evidence has been relatively upbeat, a number of indicators still point to a slowdown on the basis of their past relationship with the official figures," he added, pointing to likely headwinds such as slower growth in employment and real earnings and lower confidence that could be balanced by low interest rates and a likely easing in the fiscal squeeze at November's Autumn Statement from the new Chancellor.

In the eurozone, inflation was confirmed at 0.2% in August, unchanged from July and as expected by analysts, according to data from Eurostat.

Still to come, a batch of US data will be released including retail sales at 1330 BST, initial jobless claims at 1330 BST, existing home sales at 1400 BST and manufacturing and industrial production data at 1415 BST.

Meanwhile, oil prices rose after the Energy Information Administration reported an unexpected decline in weekly US crude inventories. Brent crude increased 0.99% to $46.31 per barrel and West Texas Intermediate gained 0.70% to $43.89 per barrel at 1133 BST.

On the company front, high street fashion stalwart Next was under the cosh after posting a drop in first-half profit and highlighting challenging trading since July.

Supermarket chain Wm. Morrison was on the front foot after it reported a jump in first-half profit.

Informa traded higher after announcing plans to buy Penton Information Services for £1.2bn.

FTSE 250 electronics distributor Electrocomponents surged after saying it expects to post a significant increase in first-half pre-tax profit following stronger-than-anticipated trading.

Shares in JRP Group, the newly merged Just Retirement and Partnership Assurance, gained as the retirement service provider raised its target for synergies from the deal as it delivered benefits ahead of schedule. The FTSE 250 company said it expects to achieve yearly savings of at least £45m by the end of 2018, a 13% increase on its prior prediction having so far made £15m since April's £1.6bn merger.

Market Movers

FTSE 100 (UKX) 6,692.13 0.28%
FTSE 250 (MCX) 17,608.44 -0.13%
techMARK (TASX) 3,451.78 0.02%

FTSE 100 - Risers

Morrison (Wm) Supermarkets (MRW) 208.60p 7.75%
Coca-Cola HBC AG (CDI) (CCH) 1,729.00p 3.97%
Tesco (TSCO) 167.05p 3.31%
RSA Insurance Group (RSA) 523.50p 2.85%
Informa (INF) 710.00p 2.38%
Diageo (DGE) 2,111.50p 1.81%
Sainsbury (J) (SBRY) 239.20p 1.74%
Ashtead Group (AHT) 1,231.00p 1.65%
Standard Life (SL.) 339.60p 1.52%
BHP Billiton (BLT) 994.80p 1.38%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 1,269.00p -5.58%
Next (NXT) 4,952.00p -4.95%
Marks & Spencer Group (MKS) 313.70p -2.52%
Hikma Pharmaceuticals (HIK) 2,121.00p -0.93%
AstraZeneca (AZN) 4,907.50p -0.90%
Provident Financial (PFG) 2,877.00p -0.86%
Berkeley Group Holdings (The) (BKG) 2,555.00p -0.82%
Royal Bank of Scotland Group (RBS) 195.90p -0.76%
Mondi (MNDI) 1,573.00p -0.76%
Lloyds Banking Group (LLOY) 56.40p -0.74%

FTSE 250 - Risers

JRP Group (JRP) 114.10p 17.27%
Electrocomponents (ECM) 342.50p 13.49%
Circassia Pharmaceuticals (CIR) 94.25p 4.72%
RPC Group (RPC) 885.00p 3.63%
Redrow (RDW) 403.70p 3.51%
Softcat (SCT) 340.60p 3.06%
Booker Group (BOK) 181.90p 2.31%
Auto Trader Group (AUTO) 400.00p 1.96%
Acacia Mining (ACA) 492.80p 1.82%
Millennium & Copthorne Hotels (MLC) 432.10p 1.67%

FTSE 250 - Fallers

Sports Direct International (SPD) 287.90p -5.98%
Hochschild Mining (HOC) 254.30p -5.53%
Brown (N.) Group (BWNG) 185.20p -3.54%
Inmarsat (ISAT) 713.50p -3.39%
Supergroup (SGP) 1,433.00p -2.45%
Assura (AGR) 57.80p -2.45%
Evraz (EVR) 127.20p -2.38%
Countrywide (CWD) 226.80p -2.24%
Amec Foster Wheeler (AMFW) 531.00p -2.12%
Big Yellow Group (BYG) 737.00p -2.06%