By Carla Mozee, MarketWatch
Inflation rate flat in February
LONDON (MarketWatch) -- U.K. stocks clung to record levels
Tuesday, with consumer-related shares advancing as data showed U.K.
consumer prices were flat on an annual basis for the first time in
more than five decades.
But the benchmark FTSE 100's gain was capped in part by losses
for British Gas's parent company Centrica PLC following a ratings
downgrade.
The FTSE 100 rose 0.1% to 7,042.95, led by the consumer-goods
and services sectors. The index on Monday
(http://www.marketwatch.com/story/ftse-100-pulls-back-from-record-high-2015-03-23)
notched a new record high, at 7,037.67.
On Tuesday, shares of British Airways parent company
International Consolidated Airlines Group PLC picked up 1.9%.
Luxury-goods maker Burberry Group PLC rose 1.2% as did retailer
Sports Direct International PLC .
The Office for National Statistics said the annual inflation
rate was flat in February. That marked the weakest annual inflation
rate recorded in historical estimates since March 1960
(http://www.marketwatch.com/story/uk-inflation-rate-falls-to-zero-in-february-2015-03-24),
and the first time prices haven't risen since official records
began in 1989. The flat reading stemmed from a drop in prices in
oil, fuels as well as food.
The pound (GBPUSD) fell against the dollar after the data,
fetching $1.4909 compared with $1.4954 late Monday.
"The Bank of England have said that until the inflation
situation improves, and the numbers start to show signs that they
will return to the 2% target rate within the medium term, there
will be no intention to raise interest rates," said James Hughes,
chief market analyst at eToro, in a note Tuesday.
On the bottom end of the FTSE 100, shares of Centrica fell 1.2%
after Deutsche Bank downgraded the parent firm of British Gas to
hold from sell, citing risk from the U.K. general election in
May.
Wolseley PLC shares fell 3.3%, after the company swung to an
interim half-year net loss of 58 million pounds
(http://www.marketwatch.com/story/wolseley-falls-to-net-loss-but-lifts-dividend-2015-03-24)
($86.8 million). But the heating and plumbing products supplier
also raised its dividend by 10% to 30.25 pence a share.
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