By Carla Mozee, MarketWatch
Bank of England holds key rate at record low
U.K. stocks edged higher Monday, building its last week's post
general-election rally, with miners gaining after China made
another move to stimulate its economy.
Meanwhile, the pound (GBPUSD) was little changed at around
$1.5483 after the Bank of England Monday afternoon met market
expectations by leaving the benchmark interest rate at 0.5%. Its
quantitative-easing program was also left unchanged, at 375 billion
pounds ($579.5 billion). Sterling late Friday bought $1.5375.
The FTSE 100 held to a gain of 0.2% at 7,057.36.
Investors will now turn their focus to the bank's quarterly
inflation report, due Wednesday, "and two important factors will be
wage inflation and core inflation. Given that oil prices have
bounced fairly rapidly from their lows, the footprint will start
emerging rather sooner," said Naeem Aslam, chief market analyst at
AvaTrade, in a note.
Momentum for the U.K. economy has shown signs of picking up and
"given the election uncertainty is over, we are expecting [Bank of
England Governor Mark] Carney to increase his drum beat and show
more of his hawkish side," said Aslam.
Mining stocks on Monday rose, after the People's Bank of China's
decide on Sunday to cut its benchmark lending and deposit rates by
a quarter of a percentage point
(http://www.marketwatch.com/story/china-cuts-rates-as-economic-slowdown-deepens-2015-05-10).
The third rate cut in six months highlights concerns about slowing
in the world's second-largest economy.
Glencore popped up 2% and Anglo American PLC rose 1.8%. BHP
Billiton PLC (BHP) added 1.5%, and Rio Tinto PLC (RIO) moved up
1.7%.
Decliners on the blue-chip index included InterContinentals
Hotels Group PLC and HSBC PLC (HSBC), losing 1.4% and 0.6%,
respectively.
The FTSE 100 on Friday jumped 2.3%
(http://www.marketwatch.com/story/ftse-100-pound-leap-with-conservatives-on-track-for-election-win-2015-05-08)
after the country's general election resulted in the Conservative
Party taking a slim majority in the U.K. parliament.
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