By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K. stocks headed for their first rise
in three days on Thursday, with Barclays leading advancers after a
strategy update. The benchmark index also stayed higher after the
Bank of England left policy on hold as expected.
The FTSE 100 index picked up 0.6% to 6,833.62, on track for its
highest close since late February.
Shares of Barclays (BCS) topped the list of gainers, rising 5.2%
after the U.K. bank presented its strategy update. Barclays plans
to ax 7,000 jobs at its investment bank by 2016 and to create a
"bad bank" division consisting of 115 billion pounds ($195 billion)
of risk-weighted assets.
Other banks were also higher, with shares of Royal Bank of
Scotland Group PLC (RBS) up 1% and Lloyds Banking Group PLC (LYG)
rising 0.5%. Sector heavyweight HSBC Holdings PLC (HSBC) slipped
0.7%, adding to a 1.3% loss from Wednesday when the bank reported a
fall in profit and revenue for the first quarter.
Also in focus in London, the Bank of England left its key
lending rate at a record low of 0.5% and made no changes to its 375
billion pound ($635.8 billion) asset-purchase program. The decision
was widely expected as policy makers have signaled they won't raise
rates until the remaining slack in the economy has been
absorbed.
Since the last BOE meeting, the U.K. unemployment rate has
dropped below 7%, which -- according to the bank's initial
forward-guidance framework from August -- was the threshold for
policy makers to consider raising interest rates. However, in
February the BOE introduced an updated interest-rate framework and
said it would focus on a wider range of economic indicators rather
than just the joblessness rate. Most economists now expect the
first 25-basis-point rate hike to come in 2015.
"The inflation report next week will be much more interesting,
as it could signal a shift towards an earlier rate hike, in light
of the recent strong data," analysts at Danske Bank said in a note.
The U.K. inflation report is scheduled for publication on
Wednesday.
Among other movers in London, shares of BT Group PLC (BT) picked
up 3.2% after the telecom company posted a rise in fourth-quarter
profit despite lower revenue, as its sports TV channels boosted
business.
On a more downbeat note, shares of Sage Group PLC slid 5.8%
after the software firm said Chief Executive Guy Berruyer will
retire, leaving no later than March 31, 2015. The company said it
swung to a pretax profit in the half year ended March 31.
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