UK Manufacturing Rises, Bank of England Holds Rates, Bond Program

Arthi Gupta
10 May, 2012
New York City

The UK indexes gained. The BoE policymakers retained the size of quantitative easing and interest rate unchanged. The UK production fell but manufacturing output rose in March. Irish inflation eased to 15-month low in April.

[R]3:30 PM London – The UK indexes gained. The BoE policymakers retained the size of quantitative easing and interest rate unchanged. The UK production fell but manufacturing output rose in March. Irish inflation eased to 15-month low in April.[/R]

The UK indexes gained after the Bank of England policymakers maintained the size of quantitative easing unchanged at £325 billion and the interest rate was retained at a historic low of 0.50%.

The rate has been maintained at the current level since March 2009 and is the lowest since the central bank was established in 1694.

However, developments in Greece have dampened investor sentiment with the prospect of another election increasingly likely in the next six weeks. Alexis Tsipras, the head of party with the second largest seat-win failed in his bid to form a coalition government as expected.

In London, the benchmark index FTSE 100 gained 26.33 or 0.5% to 5,556.62 and the pound edged higher to $1.6165.

UK Manufacturing Rises, Output Falls

UK manufacturing output expanded more than expected in March, data from the Office for National Statistics showed today.

Manufacturing output grew 0.9% in March after contracting 1.1% in February.

The annual decline in manufacturing output was 0.9% in March as seven sub sectors fell following a 1.5% drop in February.

Industrial production dropped 0.3% from a month ago in March, reversing a 0.4% rise in February.

UK Mortgage Repossessions Steady

The number of property repossessions in the UK remained stable at 9,600 in the first quarter of 2012 compared to the same period last year, the Council of Mortgage Lenders said.

However, repossessions were higher than the 8,700 in the fourth quarter of 2011.

Irish Inflation Drops

Ireland''s annual consumer price inflation eased to 1.9% in April from 2.2% in March, data released by the Central Statistics Office showed. The latest data was the lowest since January 2011, when consumer prices rose 1.7%.

Food and non-alcoholic beverages prices rose 0.5% annually, while clothing and footwear prices advanced 0.4% in April.

Gainers & Losers

BT Group Plc rose 0.1% to $34.97 after the telecom operator reported fourth quarter revenue fell 4% to £4.88 billion from £5.06 billion last year. EBITDA for the quarter increased 4% to £1.61 billion.

HSBC Holdings Plc gained 0.9% to 556 pence after the multinational bank confirmed discussions regarding the possible sale of its operations in Colombia, Peru, Uruguay and Paraguay.

Legal & General Group PLC climbed 1.4% to 113 pence after the insurer appointed Nigel Wilson as Group Chief Executive succeeding Tim Breedon.

Old Mutual Plc soared 3% to 148.20 pence after the Anglo-South African insurer first quarter total life assurance sales annual premium equivalent declined 12.7% to £269 million from £308 million in the prior-year quarter.

Rio Tinto Plc increased 1% to 3,158 pence after the miner said that demand for many of its products will likely double over the next twenty years and it is well positioned to meet that demand. Chief executive also said he is more confident about the global economic outlook than six months ago.