By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- The U.K.'s FTSE 100 index was little
changed on Thursday ahead of the monetary-policy decision from the
Bank of England and the Chancellor of the Exchequer's update on the
economy.
The benchmark traded slightly higher at 6,511.80 after closing
in negative territory for a fourth straight day on Wednesday.
The U.K.'s central bank was in the spotlight as investors waited
for its decision on interest rates due at noon London time, or 7
a.m. Eastern time. Most analysts expect the BOE to keep its key
interest rate at a record low of 0.5% and make no changes to its
375-billion-pound ($614 billion) asset-purchase program.
"Indeed, having in August put in place its commitment to keep
rates and its asset holdings unchanged until at least the
unemployment rate falls to 7.0% -- and last week moved to take some
of the heat out of the housing market by removing the eligibility
of mortgage loans from the Funding for Lending Scheme -- the MPC is
certain to keep its monetary policy settings unchanged," said
analysts at Daiwa Capital Markets in a note.
Also on Thursday, the Chancellor of the Exchequer George Osborne
will deliver his autumn statement on the economy. The Daiwa
analysts said that this should be his most upbeat statement yet,
given the more positive economic backdrop.
"The previous growth forecasts of just 0.6% in 2013 and 1.8% for
2014 published by the [Office for Budget Responsibility] just six
months ago seem likely to be revised up to around 1.5% and 2.5%
respectively. So we would also expect a notable reduction in the
forecast of government borrowing this fiscal year from the previous
prediction of GBP120 billion," they said.
Among notable movers in London, miners posted some of the
biggest gains, building on advances seen on Wednesday. Shares of
Vedanta Resources PLC added 2.5%, Fresnillo PLC gained 2.1% and Rio
Tinto PLC (RIO) picked up 1.6%.
Outside the main index, Drax Group PLC rallied 6% after J.P.
Morgan Cazenove lifted the utility firm to overweight from
neutral.
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