LONDON, Feb 4 — British shares rose today as a set of positive earnings boosted hopes of an economic recovery, with investors looking to Bank of England’s policy meeting later in the day.
The BoE is expected to keep its benchmark interest rate on hold at 0.1 per cent and refrain from further increasing its bond-buying programme, which has doubled over the past year.
The blue-chip FTSE 100 index rose 0.6 per cent, with travel and mining stocks leading the gains, while the mid-cap index added 0.6 per cent.
“The pressure on Bank of England to add further stimulus has clearly reduced, as rollouts of vaccines are obviously going well and there is now a good prospect of the recovery beginning in the spring,” said James Smith, market economist at ING.
“The question everybody wants today is, how is the bank going to change its narrative on negative rates.”
The export-oriented and commodity stocks-heavy FTSE 100 has rebounded from early-2021 losses to trade 1.3 per cent higher for the year, and is set to post a weekly gain as vaccinations pick up pace, corporate earnings improve and commodity prices increase.
BT, Britain’s biggest broadband and mobile operator, climbed 1 per cent after saying it remained on track for the year.
Britain’s biggest housebuilder Barratt Developments rose 3.2 per cent on a near 2 per cent increase in its first-half pretax profit, benefiting from a rebound in demand.
Oil producing heavy-weight Royal Dutch Shell gained 0.7 per cent after raising its first-quarter dividend, but its fourth-quarter profit dropped 87 per cent, dragged down by continued weak energy consumption.
FMCG company Unilever dropped 3.6 per cent and was set to record its worst day since March last year, even after its fourth-quarter sales growth met estimates.
Premier Inn-owner Whitbread jumped 4.8 per cent and was the top gainer on the FTSE 100 after it struck an agreement with creditors to extend the maturity of its revolving credit facility by one year to September 2023. — Reuters
