U.K. stocks fell, following the biggest five-day rally since April, as minutes from the latest monetary-policy meeting of the Bank of England showed two of the nine officials argued for an interest-rate increase this month.
Balfour Beatty Plc dropped the most since May 6 after rejecting an increased bid from Carillion Plc. Persimmon Plc and Barratt Developments Plc retreated more than 2 percent after a seven-day rally. Centrica Plc and SSE Plc climbed as utilities rose.
The FTSE 100 Index declined 23.83 points, or 0.4 percent, to 6,755.48 at the close in London. The benchmark gauge rallied 2.2 percent in the five trading days through yesterday amid speculation that the BOE will delay raising interest rates. The broader FTSE All-Share Index dropped 0.4 percent today, while Ireland’s ISEQ Index lost 0.8 percent.
The BOE said two policy makers wanted an interest-rate increase this month, marking the first split in more than three years and the first under Governor Mark Carney.
Martin Weale and Ian McCafferty voted to increase the benchmark rate by 25 basis points from a record-low 0.5 percent, according to the minutes of the Monetary Policy Committee’s Aug. 6-7 meeting. The remaining seven members opted to keep the rate on hold, saying early tightening could leave the economy vulnerable to shocks and jeopardize indebted households.
Balfour Beatty Plc slumped 6.7 percent to 238.9 pence. The company rejected Carillion’s offer to form Britain’s biggest builder with a market valuation of more than 3 billion pounds ($5 billion). There are “considerable risks associated with the proposed business plan, including the strategy to significantly reduce the scale of the U.K. construction business when it is poised to benefit from a recovery,” Balfour said.
Barratt Developments Plc fell 2.4 percent to 359.6 pence after climbing 10 percent in the past seven trading days. Persimmon lost 2 percent to 1,322 pence. The York, England-based company rallied 11 percent since Aug. 8 through yesterday.
Centrica added 0.6 percent to 316.7 pence, while SSE increased 0.8 percent to 1,517 pence. The FTSE 350 Electricity Index and a gauge of U.K. gas and water companies both rose for a sixth day.