U.K. Stocks Decline From 1999 High Before BOE ReportNamitha Jagadeesh
U.K. stocks declined, after the benchmark FTSE 100 Index yesterday rallied to its highest level since 1999, as investors awaited the Bank of England’s quarterly inflation report.
ITV Plc slipped 5.2 percent after saying the share of viewing for its network of channels was lower in the first quarter than expected. Compass Group Plc rallied 4.4 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 3.4 percent after the packaging company said first-quarter profit rose 13 percent.
The FTSE 100 dropped 11.16 points, or 0.2 percent, to 6,861.92 at 9:42 a.m. in London. The gauge climbed 5.4 percent from a March 24 low through yesterday amid an increase in mergers-and-acquisitions activity. The broader FTSE All-Share Index dropped 0.2 percent and Ireland’s ISEQ Index fell 0.2 percent today.
“Since the last report, the U.K. economy has outperformed expectations, which is likely to present the central bank with some problems with respect to its guidance on the future path of interest rates,” Michael Hewson, a London-based market analyst at CMC Markets Plc, wrote in a note. “It would not be surprising to see some dissent start to eke out of the committee consensus on rate policy. The Bank is likely to upgrade its growth forecasts and downgrade its inflation forecast.”
Investors will weigh remarks by BOE Governor Mark Carney for clues about the U.K.’s monetary policy. The report, which includes updated economic forecasts, will be released at 10:30 a.m. in London.
Separate data showed the country’s unemployment rate fell 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.