By Carla Mozee, MarketWatch
Bank of England cuts GDP forecast
U.K. stocks rose Wednesday, with shares of brewer SABMiller PLC
among those moving higher following financial results.
But the pound turned lower after the Bank of England, in its
quarterly inflation report, cut its economic growth forecasts for
2015 and 2016, citing strength in the pound and sluggish
productivity among the reasons for the downgrades.
Sterling: The British currency (GBPUSD) fell to $1.5638 from
$1.5673 late Tuesday, after the central bank said it now expects
gross domestic product to expand by 2.5% in 2015, and by 2.6% in
2016. That compares with its previous forecasts of 2.9% growth
(http://www.marketwatch.com/story/bank-of-england-cuts-uk-growth-forecasts-2015-05-13-54854621)
for this year and next.
Before the BOE's update, the pound had hit a fresh yearly high
of $1.5745 following the release of monthly U.K. jobs data. The
Office for National Statistics said the unemployment rate fell to
5.5% in the three months to March, from 5.6% in the three months to
February. Average wage growth, including and excluding bonuses,
came in ahead of expectations. Read: U.K. wage growth picks up, job
market strengthens
(http://www.marketwatch.com/story/uk-wage-growth-picks-up-job-market-strengthens-2015-05-13)
Stocks: The FTSE 100 remained higher after the BOE and jobs
reports, rising 0.6% at 6,975.92, as consumer-goods and industrial
shares gained. The London benchmark on Tuesday fell 1.4%
(http://www.marketwatch.com/story/ftse-100-under-pressure-with-easyjet-sliding-2015-05-12),
its biggest decline since late March.
SABMiller (SBMRY) shares bounced up 2.2% as the maker of Miller
Genuine Draft, Peroni and other brands said annual net producer
revenue came in at $26.29 billion, up 5% from the year-earlier
period
(http://www.marketwatch.com/story/sabmiller-annual-profit-dips-on-currency-weakness-2015-05-13),
generally in line with analysts' expectations. Profit, however,
dipped to $3.30 billion on currency weakness against the
dollar.
"Trading conditions will continue to be challenging in light of
the significant currency gyrations we can expect to witness over
the coming months," wrote Brenda Kelly, analyst at London Capital
Group. "The increase in the dividend by 8% to $1.13 per share
should help offset any weakness in future capital gains for
investors."
Barratt Developments PLC climbed 4% as the home builder said it
expects housing completions for the full year to be ahead of
previous guidance
(http://www.marketwatch.com/story/barratt-sees-housing-completions-to-top-guidance-2015-05-13).
Mondi PLC zoomed to the top of the FTSE 100, charging up 10%
after the packaging and paper company posted a 29% rise in
underlying operating profit
(http://www.marketwatch.com/story/mondi-underlying-operating-profit-rises-2015-05-13)
to 236 million euros ($295 million) during the quarter ended March
31.
Decliners included Admiral PLC , with shares down 1.6%. The
insurer said Chief Executive Henry Engelhardt will step down next
year after 24 years in the role. Chief Operating Officer David
Stevens will succeed Engelhardt.
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