London midday: Stocks rise as BoE keeps rates unchanged, raises GDP forecasts

London stocks rose after the Bank of England voted unanimously to keep interest rates unchanged and raised its economic growth forecasts.

At 1206 GMT, the FTSE 100 rose 0.33% to 7,131.47 points.

At the same time, the pound fell 0.23% versus the dollar to $1.2630 and dropped 0.56% against the euro to €1.1688.

The Bank decided to maintain interest rates at 0.25%, the asset purchase programme at £435bn and corporate bond purchases at up to £10bn. The minutes of the policy meeting showed policymakers voted 9-0 in favour of the decision.

In the BoE’s Quarterly Inflation Report, the central bank upgraded its estimates for the economy for the second time since the Brexit vote last June. The Monetary Policy Committee now predicts gross domestic product rising 2.0% this year, compared to 1.4% at its November inflation report when it also raised forecasts.

BoE Governor Mark Carney will speak on the inflation report at a press conference at 1230 GMT.

Elsewhere in the UK, investors continued to weigh parliament’s vote on Wednesday evening in favour of giving Prime Minister Theresa May the power to invoke Article 50, which begins the formal Brexit process. In the historic vote, a total of 498 MPs voted 'aye' to defeat the 114 'no's, a majority of 384, to allow May to kick off the two-year process.

Brexit secretary David Davis will present MPs with a white paper setting out the government’s plans for leaving the EU shortly after midday.

On the data front, UK construction sector growth slowed more than expected in January. The Markit construction purchasing managers' index (PMI) for January fell to 52.2 from 54.2 the previous month, worse than the 53.8 consensus estimate and the slowest rate of growth since last summer.

Company-wise, Reckitt Benckiser rallied after the maker of Durex and Nurofen confirmed that it is in “advanced negotiations” to buy US baby milk company Mead Johnson for around $16.7bn, a move which could bolster its health products business.

Royal Dutch Shell was on the front foot even as the oil producer reported a decline in full year profits, although investors were cheered by the company’s underlying strength and its decision to maintain a dividend. The company said profits in the fourth quarter were hit by the legacy of its BG acquisition and the reassessment of its tax position.

Laith Khalaf, senior analyst at Hargreaves Lansdown said: “It looks like Shell has weathered the storm of plummeting commodity prices, while maintaining its legendary record of not cutting a dividend since the end of World War II.

“Indeed UK shareholders have seen a nice jump in their income stream, thanks to the declining pound and the fact that Shell posts its dividends in dollars.”

Anglo-Swiss miner Glencore gained after saying that that its production was in line with guidance for 2016 with an increase in nickel mined and production suspended for copper, zinc, coal and oil. The FTSE 100 company also maintained its production guidance for 2017.

GVC Holdings advanced as the multinational sports betting and gaming group confirmed it has now repaid in full the outstanding loan of €386m provided by Cerberus Business Finance, through a combination of existing cash resources and the drawdown of the €250m loan from Nomura International.

Worldpay slumped as Ship Global 2, a company jointly owned by funds managed by Advent International and Bain Capital, said it has sold 214m shares in the company at 282.75p each. Also on Thursday, Worldpay announced it has poached Santander’s former head of global innovation Peter Jackson to head its UK business, starting on 1 March.

AstraZeneca was under the cosh as the drug maker posted flat core earnings for 2016 after a 13% decline in revenues in the fourth quarter.

Aberdeen Asset Management’s shares declined after it revealed Donald Trump's election win derailed a solid start to the financial year, leading to £10.5bn of outflows from its emerging markets-focused funds as investors moved into less volatile assets. The group reported a 3% drop in assets under management for the first quarter to £302.7bn.

Market Movers

FTSE 100 (UKX) 7,124.26 0.23%
FTSE 250 (MCX) 18,225.83 -0.08%
techMARK (TASX) 3,242.53 -0.11%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 6,835.00p 3.33%
Reckitt Benckiser Group (RB.) 7,034.00p 2.99%
Compass Group (CPG) 1,432.00p 2.51%
Royal Dutch Shell 'B' (RDSB) 2,261.00p 1.71%
Hikma Pharmaceuticals (HIK) 1,911.00p 1.65%
Whitbread (WTB) 3,993.00p 1.63%
Royal Dutch Shell 'A' (RDSA) 2,170.50p 1.57%
Paddy Power Betfair (PPB) 8,460.00p 1.56%
Anglo American (AAL) 1,390.50p 1.39%
Fresnillo (FRES) 1,486.00p 1.36%

FTSE 100 - Fallers

Worldpay Group (WPG) 275.40p -4.28%
Capita (CPI) 484.90p -2.83%
AstraZeneca (AZN) 4,196.00p -1.20%
London Stock Exchange Group (LSE) 3,161.00p -1.13%
Land Securities Group (LAND) 992.00p -1.00%
3i Group (III) 701.50p -0.92%
Royal Bank of Scotland Group (RBS) 222.20p -0.89%
Standard Life (SL.) 346.70p -0.86%
British Land Company (BLND) 580.00p -0.85%
Aviva (AV.) 480.20p -0.83%

FTSE 250 - Risers

GVC Holdings (GVC) 648.00p 5.19%
Evraz (EVR) 244.40p 3.91%
Kaz Minerals (KAZ) 506.50p 3.79%
Centamin (DI) (CEY) 165.00p 2.93%
Rightmove (RMV) 4,153.00p 2.82%
Howden Joinery Group (HWDN) 390.70p 2.82%
JRP Group (JRP) 150.70p 2.80%
Grainger (GRI) 243.10p 2.19%
Vedanta Resources (VED) 1,097.00p 2.14%
Hochschild Mining (HOC) 246.00p 2.07%

FTSE 250 - Fallers

Mitchells & Butlers (MAB) 261.00p -3.83%
TalkTalk Telecom Group (TALK) 162.10p -3.74%
Aberdeen Asset Management (ADN) 249.80p -3.22%
Nostrum Oil & Gas (NOG) 461.30p -3.07%
Mitie Group (MTO) 195.50p -2.49%
Card Factory (CARD) 243.90p -2.48%
Cobham (COB) 131.90p -2.37%
Wizz Air Holdings (WIZZ) 1,584.00p -1.98%
Ocado Group (OCDO) 237.80p -1.98%
Victrex plc (VCT) 1,864.00p -1.89%