May 14 (Bloomberg) -- U.K. stocks were little changed, erasing earlier losses, as Bank of England Governor Mark Carney said officials may wait until next year to raise rates, even as the economy moves closer to needing a tighter monetary policy.
ITV Plc slipped the most since September 2011 after saying the share of viewing for its network of channels was lower in the first quarter than expected. Compass Group Plc added 1.6 percent after posting an increase in first-half sales and saying it will return 1 billion pounds ($1.7 billion) to shareholders. Mondi Ltd. gained 1.3 percent after the packaging company said first-quarter profit rose 13 percent.
The FTSE 100 Index advanced 5.41 points, or 0.1 percent, to 6,878.49 at the close of trading in London. Glencore Xstrata Plc, GlaxoSmithKline Plc and seven other FTSE 100 companies traded without the rights to dividends today, shaving 15.7 points off the equity benchmark. The gauge has climbed 5.5 percent from a March 24 low amid an increase in deal activity. The FTSE All-Share Index rose less than 0.1 percent today and Ireland’s ISEQ Index slid 1.2 percent.
“The inflation report seems to validate market expectations for a rate increase,” Gerard Lane, a strategist at Shore Capital Group Ltd. in Liverpool, England, said in a phone interview. “The forecast for inflation is very close to the BOE’s 2-percent target rate. Everything’s fine with the U.K. economy. One concern is that productivity growth is low.”
Carney said today the BOE sees inflation staying close to its 2 percent target over the next three years, based on investor expectations that it will not increase its record-low interest rate until the second quarter of 2015. Officials said in the Inflation Report that the U.K. has scope to cut labor-market slack -- the net proportion of people who are either unemployed or underemployed -- further before the BOE raises rates.
The BOE predicted price growth of 1.8 percent this year and next and 1.9 percent in 2016. The economy will expand 3.4 percent this year and 2.9 percent in 2015, according to the report.
Industrial production in the U.K. fell 0.1 percent in March, following a 0.8 percent gain the previous month, data released on May 9 showed.
A report today from the Office for National Statistics showed the country’s unemployment rate declined to 6.8 percent in March, the lowest in five years. That matched the median estimate of economists in a Bloomberg survey and compared with 6.9 percent in February. The rate is measured using International Labour Organization methods.
The volume of shares changing hands in FTSE 100-listed companies was 24 percent lower than the average of the past 30 days at this time of the day, data compiled by Bloomberg showed
ITV dropped 6.2 percent to 179.1 pence. The U.K.’s biggest commercial broadcaster said revenue from ITV Studios fell 4 percent in the first quarter because of how program delivery is phased. The company forecast good sales growth for the year and net advertising revenue for its network of channels to exceed that of the whole industry in the first half.
Renishaw Plc tumbled 7.5 percent to 1,701 pence after saying revenue in the three months ended March 31 was affected by a strengthening pound. Pretax profit fell 9 percent to 14.4 million pounds, according to a statement from the maker of precision measuring and calibration equipment.
Compass climbed 1.6 percent to 996 pence, its highest price since at least 2001. The world’s biggest catering company said it will return money to shareholders through a special dividend and share consolidation. First-half revenue excluding some items rose 4.2 percent on an organic basis to 8.7 billion pounds, the company said.
Mondi gained 1.3 percent to 1,044 pence as South Africa’s biggest paper and packaging company said first-quarter adjusted operating profit rose to 183 million euros ($251 million) from 162 million euros a year earlier.
3i Group Plc rallied 5.8 percent to 400.2 pence. Britain’s biggest publicly traded private-equity firm said it will pay a final dividend of 13.3 pence a share, exceeding the Bloomberg dividend forecast of 5.4 pence.
Patisserie Holdings Ltd. jumped 15 percent to 195 pence on its first day of trading in London. The owner of the Patisserie Valerie chain of cafes raised 32.8 million pounds before expenses in the initial public offering, according to a statement.
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