U.K. Stocks Little Changed After BOE Minutes, Jobs Report

U.K. stocks were little changed, after a three-day gain, as investors weighed minutes from the Bank of England’s meeting and data that showed unemployment in the nation unexpectedly rose.

Sports Direct International Plc (SPD) gained 7.1 percent after reporting third-quarter revenue rose 11 percent. Wm Morrison Supermarkets Plc (MRW) jumped 4.9 percent after a report said bankers are putting together a financing deal to support a buyout. Marks & Spencer Group Plc (MKS) rose 1 percent after Jefferies Group LLC recommended buying the stock. BT Group Plc lost 1.2 percent after closing at a 13-year high yesterday.

The FTSE 100 Index (UKX) added 0.28 point to 6,796.71 at the close in London. The FTSE All-Share Index was little changed, while Ireland’s ISEQ Index rose 0.4 percent.

“As the unemployment rate moved away from the Bank of England’s target, interest rates will remain rock bottom for the foreseeable future,” David Madden, market analyst at IG in London, wrote in a note today.

The FTSE 100 has rallied 5.4 percent since its low on Feb. 4 as the BOE said Britain is not ready for an increase in interest rates and comments by Federal Reserve Chair Janet Yellen fueled optimism the U.S. economy can withstand reduced monthly bond purchases. The gauge is 0.6 percent away from the eight-month high it reached on Jan. 20.

Minutes from the BOE’s Feb. 5-6 meeting published today showed the central bank’s nine policy makers were united this month on the need to keep the current stance. The minutes also showed the MPC didn’t hold a vote on the new phase of forward guidance Governor Mark Carney introduced this month. Under that program, the MPC will switch its focus from the unemployment rate to spare capacity and a range of other indicators.

U.K. Unemployment

A report showed the U.K. unemployment rate unexpectedly rose to 7.2 percent in the fourth quarter, the first increase since February last year, from 7.1 percent in the three months through November, the Office for National Statistics said. The median economist estimate called for no change. In January, jobless claims fell 27,600, more than economists had forecast.

In the U.S., a Commerce Department report showed construction of new homes fell to a more-than-forecast 880,000 annual pace in January from a revised 1.05 million rate in December.

The Fed releases the minutes of its Jan. 28-29 meeting after European markets close today. At the meeting, the last under former chairman Ben S. Bernanke, policy makers reduced the bank’s monthly asset purchases by $10 billion to $65 billion, citing the improved outlook for the labor market.

Sports Direct

Sports Direct gained 7.1 percent to 767 pence, the highest since Dec. 11. The athletic-apparel retailer said third-quarter revenue rose to 665.4 million pounds (1.11 billion). Gross margin was strong, Liberum Capital Ltd. and Oriel Securities Ltd. wrote in notes.

Morrison jumped 4.9 percent to 244 pence. Bankers are putting together a debt-financing deal of about 5 billion pounds to support a sale of the grocer to private-equity firms, Reuters reported, citing unidentified banking sources. The company declined to comment in the Reuters story.

Rival Tesco Plc (TSCO) also rose, climbing 1.8 percent to 335.8 pence. J Sainsbury Plc gained 0.9 percent to 348.1 pence.

Marks & Spencer rose 1 percent to 501 pence, the highest since November. Jefferies raised its rating on the clothing retailer to a buy from hold, saying the company’s new Website is one of the best in the industry. That may help improve sales and profits, the brokerage said. Jefferies increased its price estimate by 25 percent to 600 pence.

BT Group lost 1.2 percent to 413 pence. Shares of the biggest U.K. phone company jumped to 418.1 pence yesterday, their highest price since February 2001.

Persimmon Plc (PSN) also fell, declining 1.9 percent to 1,417 pence for the biggest drop in the FTSE 100 today. The U.K.’s largest homebuilder rose to the highest price since April 2007 yesterday.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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