UK Holds Rate at 0.5%; Home Retail Group Plunges 12.5%

Arthi Gupta
09 Jun, 2011
New York City

The UK indexes gained after the Bank of England left key rate and the size of quantitative easing for the 27th month in a row. The UK trade deficit narrowed in April. Irish consumer price inflation slackened in May. BMW planned additional investment of

[R]3:15 PM London – The UK indexes gained after the Bank of England left key rate and the size of quantitative easing for the 27th month in a row. The UK trade deficit narrowed in April. Irish consumer price inflation slackened in May. BMW planned additional investment of £500 million in its UK production units.[/R]

In London, FTSE 100 Index gained 10.57 or 0.18% to 5,819.46 and the pound edged higher to $1.6432.

BoE Maintains Key Rate

The Bank of England left its record low interest rate for the 27th month in a row as well as the size of quantitative easing unchanged.

The Monetary Policy Committee decided to hold the bank rate at 0.5%, the lowest since the bank was established in 1694 and also maintained the size of quantitative easing at £200 billion.

UK Trade Deficit Narrows

The UK trade deficit narrowed to £7.4 billion in April from £7.7 billion in March, the Office for National Statistics showed today.

Total exports increased 0.1% on a monthly basis to £24.6 billion, while imports fell 0.9% to £32 billion in April.

The seasonally adjusted total deficit on trade in goods and services was £2.8 billion in April, unchanged from the March data.

Irish Consumer Price Inflation Slackens

Ireland''s consumer price index increased 2.7% annually in May compared to the 3.2% rise recorded in April, data released by the Central Statistics Office showed on Thursday.

On a monthly basis, consumer prices grew 0.1% in May, after rising 0.4% in April.

Former BP Chief Plans IPO

Tony Hayward, the former chief executive officer of BP plc plans to raise £1 billion through an initial public offering in London of Vallares Plc, which he co-founded, aiming to invest in oil and gas assets.

BMW Raises Investment

BMW Group, the German car manufacturer said it is investing an additional £500 million in its UK production network over the next 3 years. This will bring the company''s investment across all its UK operations to more than £1.5 billion since 2000.

The company also confirmed that the UK would be a production location for its next generation MINI models.

Gainers & Losers

API Group plc slumped 13.83% to 32.10 pence after the packaging materials maker said fiscal year 2011 revenue increased 26.2% to £99.96 million from £79.19 million last year. The company''s full-year profit before tax from continuing operations was £2.86 million compared with a pre-tax loss of £0.34 million a year ago.

Halfords Group plc gained 3.1% to 410 pence after the automotive products retailer reported revenues for the 52 weeks ended April 1 increased 4.6% to £869.7 million from last year''s £831.6 million. Profit for the period increased 11% to £85.5 million from £77 million in the prior year. Earnings per share rose to 40.2 pence from 36.6 pence.

Home Retail Group Plc plummeted 12.5% to 177 pence after the home and general merchandise retailer said for the first quarter Argos total sales declined 8.1% to £817 million and like-for-like sales dropped 9.6% and Homebase, total sales were 458 million pounds, in line with last year and like-for-like sales increased 1.6%.

IG Group Holdings Plc gained 0.09% to 440.40 pence after the financial derivatives and sports betting company estimates fourth quarter revenues to rise 2% to £88 million as against last year''s £86 million.

JD Sports Fashion PLC plunged 5.6% to 925 pence after the retailer of sports fashion apparel reported lower like-for-like sales in UK and Ireland for the period between January 30 and June 4 of 2011.

The company stated cumulative like-for-like net sales of the UK and Ireland fascias declined 2.8%, with sports fascias declining 3% and fashion fascias dropping 1.6%.