London midday: Stocks slide as BoE leaves interest rates unchanged
London stocks declined on Thursday as the Bank of England kept policy unchanged amid uncertainty surrounding the European Union referendum.
The BoE left interest rates at 0.5% and the asset purchase programme at £375bn, as expected by analysts.
The decision came on the back of prolonged low inflation, weak wage growth, a slowing economy and worries about a possible vote to leave the EU at the 23 June referendum.
Earlier, the Federal Reserve and the Bank of Japan also decided to stand pat on policy measures.
The Fed on late Wednesday left interest rates unchanged at 0.25% to 0.50%, as expected, while Chair Janet Yellen struck a fairly dovish note and conceded the upcoming UK referendum was a factor in the decision.
The Bank of Japan on Thursday maintained interest rates at negative 0.1% and decided against additional stimulus, sending the yen to a two-year high.
In economic data, UK retail sales volumes increased 6% in May compared to the same month a year ago, well ahead of forecasts for a 3.8% increase, the Office for National Statistics said. Retail sales growth was driven by clothing sales, which rebounded from weakness in April during colder than normal weather.
“Even though there is plenty of uncertainty ahead of next week’s EU referendum, consumers have still been spending on the high street which is what the government needs,” said Dennis de Jong, managing director of UFX.com.
The eurozone remained in deflation in May, according to Eurostat. The consumer price index fell 0.1% in May, as expected, up from a 0.2% decline in April.
Still to come, US inflation and US initial jobless claims at 1330 BST.
Meanwhile, oil prices continued to fall on Brexit fears and global supply glut worries with Brent crude down 1.3% to $48.30 per barrel and West Texas Intermediate down 1.5% to $47.29 per barrel at 1204 BST.
Among corporate stocks, WS Atkins advanced after it reported a 6% rise in revenue in its final results on Thursday, to £1.86bn.
N Brown rallied after the clothing retailer said it was confident of hitting full year targets.
Safestore edged higher after the storage firm said early trading in the second half had been encouraging and it was confident that the business would deliver a strong performance for the year as a whole.
Market Movers
FTSE 100 (UKX) 5,932.60 -0.57%
FTSE 250 (MCX) 16,152.81 -0.89%
techMARK (TASX) 2,953.63 -0.62%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 6,865.00p 3.86%
Fresnillo (FRES) 1,244.00p 2.64%
Berkeley Group Holdings (The) (BKG) 2,989.00p 1.18%
British Land Company (BLND) 709.50p 0.64%
BP (BP.) 361.45p 0.54%
Land Securities Group (LAND) 1,114.00p 0.45%
Tesco (TSCO) 151.60p 0.26%
Sky (SKY) 854.50p 0.18%
Taylor Wimpey (TW.) 171.00p 0.18%
BT Group (BT.A) 401.05p 0.16%
FTSE 100 - Fallers
Anglo American (AAL) 598.50p -5.15%
3i Group (III) 501.50p -4.02%
Ashtead Group (AHT) 959.50p -3.86%
Mediclinic International (MDC) 856.50p -3.27%
BHP Billiton (BLT) 798.50p -2.86%
Severn Trent (SVT) 2,134.00p -2.60%
Barclays (BARC) 157.95p -1.86%
International Consolidated Airlines Group SA (CDI) (IAG) 467.10p -1.68%
Rio Tinto (RIO) 1,938.50p -1.57%
Standard Chartered (STAN) 497.10p -1.56%
FTSE 250 - Risers
Brown (N.) Group (BWNG) 230.20p 7.37%
Centamin (DI) (CEY) 115.80p 5.08%
Atkins (WS) (ATK) 1,254.00p 4.24%
Euromoney Institutional Investor (ERM) 989.00p 4.11%
Jimmy Choo (CHOO) 112.80p 3.30%
Safestore Holdings (SAFE) 350.00p 2.25%
CLS Holdings (CLI) 1,510.00p 2.03%
Acacia Mining (ACA) 347.10p 1.58%
Homeserve (HSV) 477.40p 1.40%
Cobham (COB) 138.40p 1.32%
FTSE 250 - Fallers
Restaurant Group (RTN) 315.90p -7.60%
William Hill (WMH) 275.80p -5.97%
Kaz Minerals (KAZ) 130.90p -5.69%
Indivior (INDV) 214.50p -5.67%
Aldermore Group (ALD) 178.80p -5.25%
Go-Ahead Group (GOG) 1,995.00p -4.64%
Tullow Oil (TLW) 232.20p -4.44%
Laird (LRD) 299.90p -4.43%
Amec Foster Wheeler (AMFW) 402.00p -3.92%
Vedanta Resources (VED) 375.70p -3.54%