BoE Sets

123jump.com Staff
06 Feb, 2009
New York City

UK manufacturing index declined 2.2% in December from November and fell 5.1% in the quarter ending in the month from the previous quarter. The Bank of England established the

[R]1:00PM New York, 6:00PM London - U.K. manufacturing index drops 2.2% in December. Bank of England sets out Asset Purchase Facility.[/R]

U.K. stock indexes increased despite the manufacturing output index plunged 2.2% in December.

Commodity stocks rallied as metal prices increased on expectations that the U.S. will introduce new measures to sustain the widening economic loss.

Gold prices climbed $2.40 to $914 per ounce and copper prices gained $1.5775 per ton.

In London trading FTSE 100 index rose 1.5% or 62.94 to 4,291.87. Of the FTSE 100 index stocks, 77 increased, 23 declined, and 2 were unchanged.

Invensys Plc led advancers in the index shares with a rise of 14.3% followed by British Airways gaining 10.5% after crude oil prices fell $1.20 to $39.4 per barrel.

U.K Manufacturing Falls 2.2% in December

The Office of National Statistics reported today that manufacturing output dropped 2.2% in December from a month earlier and declined 5.1% in the three months to December from the previous quarter.

Output in food and drinks dropped 1.7%; textile, leather and clothing 2.3%; wood and wood products 7.1%; pulp, paper, printing and publishing 5.8%; chemicals and man-made fibres 5.2%; rubber and plastic products 3%; non-metallic mineral products 6.7%.

However coke, refined petroleum and nuclear fuels rose 4.2%.

The ONS also reported that overall production dropped 4.5% in the quarter under review from the previous quarter, while output declined 7.7% from a year earlier.

Bank of England Sets out Asset Purchase Facility

Bank of England reported today that it has set out the Asset Purchase Facility that was sanctioned by the Treasury on January 29 in order to improve financing conditions for companies.

The central bank was authorized by the UK Treasury to buy £50 billion of high quality private sector assets such as commercial paper, corporate bonds, debt issued under the Credit Guarantee Scheme, syndicated loans and asset backed securities.

The BoE outlined commercial paper facility that will be operational on February 13 to enable the purchase of investment grade sterling commercial paper issued by the U.K. corporations.

The report notes this could channel funds directly to parts of the corporate sector while also underpinning secondary market activity.

Efforts are being made to explore ways in which the Asset Purchase Facility will be used to purchase syndicated loans and asset backed securities with viable securitization structures.

Gainers & Losers

Invensys Plc led advancers in the FTSE 100 index shares with a rise of 14.3% followed by increases in British Airways of 10.5%, in Royal Bank of Scotland of 9.1%, in Wolseley Plc of 8.2%, and Intercontinental of 8%.

British Airways rose as crude oil prices fell $1.2 to $39.40 per barrel.

Commodity stocks gained as gold prices climbed $2.40 to $914 per ounce and copper prices advanced to $1.5775 per pound. Vedanta Resources rose 6.8%, Rio Tinto gained 6.5% and Xstrata advanced 6%.

Schroders Plc led decliners in the FTSE 100 index shares with a fall of 3% followed by losses in Imperial Tobacco of 2.4%, in Pennon Group of 1.9%, in AstraZeneca of 1.7%, and Randgold Resources of 1.6%.