London midday: Stocks decline as BoE votes 8-1 to keep interest rates unchanged

LONDON (ShareCast) - (ShareCast News) - UK stocks declined as the Bank of England voted 8-1 to keep interest rates at 0.5% and as investors weighed Chinese data on inflation and producer prices. The BoE also voted unanimously to maintain asset purchases at £365bn. The announcement came as expected by analysts amid weak inflation and the volatility caused by China concerns.

The Monetary Policy Committee policy minutes highlighted that inflation remains well below the 2% target, with the 12-month consumer price index rising slightly to 0.1% in July.

However, policymaker Ian McCafferty was once again in favour of raising interest rates, the minutes showed.

"With economic growth and the labour market recovery looking healthy, if unspectacular, the case for higher rates is strengthening - despite inflation remaining close to zero," said Ben Brettell, senior economist at Hargreaves Lansdown (LSE: HL.L - news) . "However, it is global conditions which are concerning policymakers and tipping the scales in favour of inaction." Elsewhere in the UK, Halifax revealed that house prices rose 2.7% in August to £204,674 month-on-month, exceeding economists' expectations for a 0.5% increase and way above the 0.4% decline registered in the previous month.

Separately, the Royal Institution of Chartered Surveyors said house prices in Britain would be 6% higher at the end of the year than they were in January. The average price for a house in the UK will increase by over £16,000 from the £272,000 level it was at in December 2014, RICS said.

China CPI, PPI figures China remained in focus as data showed the consumer price index increased 2% in August from a year earlier following a 1.6% rise a month earlier, beating forecasts for a 1.8% gain.

The producer price index, however, fell 5.9% in August more than the 5.6% decline expected and July's 5.4% drop.

"China's inflation may have increased to 2%, but that is due to the increasing expense of food rather than any economic improvement; the country's producer price index, meanwhile, saw its worst drop in six years as it fell by 5.9%, adding yet another number to the tower of troublesome data coming from China," said Connor Campbell, financial analyst at Spreadex.

Trying to soothe concerns, Chinese premier Li Keqiang said China has the capacity to prevent its economy from falling apart and to succeed in its economic goals this year.

Speaking at the World Economic Forum in Beijing on Thursday, Li said China will allow foreign central banks to invest in the onshore currency market. China will establish the yuan's cross-border payment system before year-end, he added.

Companies Dixons Carphone (Stuttgart: CWB.SG - news) rallied after the company reported an 8% like-for-like increase in first quarter revenue, driven by market share gains in mobile phones.

Wm Morrison slumped after posting 35% drop in underlying first half pre-tax profit as revenue fell on the back of price cuts.

Next (Other OTC: NXGPF - news) jumped after reporting a 7.1% gain in first-half pre-tax profit, with revenue up as the company sold more items at full price than it had expected.

Home Retail Group declined after saying like-for-like sales at Argos fell 2.8% to £897m in the second quarter due to a decrease in sales of electrical goods driven by TVs , tablets and white goods.

Tullow Oil (LSE: TLW.L - news) dipped after HSBC slashed its price target on the stock to 310p from 514p to reflect the bank's lowered oil price assumptions.

Barratt Developments (LSE: BDEV.L - news) gained a day after reporting a 45% jump in profits to £565.5m, supported by improving mortgage availability and government support through its Help to Buy scheme.

Market Movers techMARK 3,101.53 -0.28% FTSE 100 6,183.78 -0.73% FTSE 250 17,072.63 -0.47% FTSE 100 - Risers Barratt Developments (BDEV) 655.50p +2.74% Ashtead Group (LSE: AHT.L - news) (AHT) 1,017.00p +2.68% Inmarsat (LSE: ISAT.L - news) (ISAT) 1,044.00p +2.05% Dixons Carphone (DC.) 427.40p +1.79% TUI AG Reg Shs (DI (KSE: 003160.KS - news) ) (TUI (LSE: TUI.L - news) ) 1,224.00p +1.16% Next (EUREX: NXTI.EX - news) (NXT) 7,745.00p +0.91% Taylor Wimpey (LSE: TW.L - news) (TW.) 200.70p +0.91% Persimmon (PSN) 2,119.00p +0.90% AstraZeneca (Swiss: AZN.SW - news) (AZN) 4,299.00p +0.73% Marks & Spencer Group (MKS) 511.00p +0.69% FTSE 100 - Fallers BHP Billiton (NYSE: BBL - news) (BLT) 1,067.00p -5.32% Admiral Group (LSE: ADM.L - news) (ADM) 1,536.00p -4.83% Morrison (Wm) Supermarkets (MRW) 169.00p -3.92% Glencore (Amsterdam: GX8.AS - news) (GLEN) 139.00p -3.61% Standard Life (LSE: SL.L - news) (SL.) 413.90p -2.57% Standard Chartered (BSE: 580001.BO - news) (STAN) 726.40p -2.37% Hargreaves Lansdown (HL.) 1,166.00p -2.26% Anglo American (LSE: AAL.L - news) (AAL) 727.20p -2.11% Aberdeen Asset Management (Other OTC: ABDNF - news) (ADN) 317.50p -2.04% Tesco (TSCO) 187.30p -2.04% FTSE 250 - Risers Vedanta Resources (Other OTC: VDNRF - news) (VED) 528.00p +3.94% Polymetal International (Other OTC: AUCOY - news) (POLY) 512.50p +3.18% Telecom Plus (LSE: TEP.L - news) (TEP) 1,107.00p +2.12% Bellway (Other OTC: BLWYY - news) (BWY) 2,591.00p +1.93% Synergy Health (Other OTC: SYHEF - news) (SYR) 1,608.00p +1.77% Phoenix Group Holdings (DI) (PHNX) 852.00p +1.61% Alent (Berlin: A0E1.BE - news) (ALNT) 490.00p +1.60% Rank Group (RNK) 262.50p +1.59% Crest Nicholson Holdings (CRST) 587.00p +1.56% PayPoint (PAY) 1,034.00p +1.37% FTSE 250 - Fallers Tullow Oil (TLW) 195.00p -6.11% Lonmin (LMI) 23.82p -6.11% Home Retail Group (HOME) 141.40p -4.91% Premier Oil (LSE: PMO.L - news) (PMO) 86.00p -4.81% PZ Cussons (LSE: PZC.L - news) (PZC) 287.90p -4.76% Entertainment One Limited (Other OTC: ENTMF - news) (ETO) 274.90p -3.78% John Laing Infrastructure Fund Ltd (JLIF) 115.30p -3.03% Petrofac Ltd. (PFC) 838.50p -3.01% Ashmore Group (Other OTC: AJMPF - news) (ASHM) 249.70p -2.76% NMC Health (LSE: NMC.L - news) (NMC (Other OTC: NMCX - news) ) 754.00p -2.71% FTSE TechMARK - Risers Gresham Computing (LSE: GHT.L - news) (GHT) 116.50p +5.91% Promethean World (Other OTC: PMTWF - news) (PRW) 40.00p +1.59% Dialight (DIA (Amsterdam: DI6.AS - news) ) 627.50p +0.72% NCC Group (LSE: NCC.L - news) (NCC (BSE: NCC6.BO - news) ) 259.25p +0.68% Innovation Group (Other OTC: INVGF - news) (TIG) 40.00p +0.63% Spirent Communications (Other OTC: SPMYY - news) (SPT (Taiwan OTC: 8431.TWO - news) ) 79.25p +0.32% RM (RM (LSE: RM.L - news) .) 172.75p +0.29% KCOM Group (LSE: KCOM.L - news) (KCOM) 94.25p +0.27% E2V Technologies (LSE: E2V.L - news) (E2V) 246.25p +0.10% IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 200.85 +0.06% FTSE TechMARK - Fallers Sarossa (SARS) 1.75p -6.67% Oxford Biomedica (LSE: OXB.L - news) (OXB) 7.81p -4.52% Ricardo (RCDO) 875.00p -2.07% Skyepharma (SKP) 359.75p -1.98% Oxford Instruments (Other OTC: OXGGY - news) (OXIG) 654.50p -1.65% XP Power Ltd (LSE: XPP.L - news) . (DI) (XPP) 1,590.00p -1.24% SDL (SDL (LSE: SDL.L - news) ) 374.00p -0.99% Sepura (SEPU) 180.00p -0.83%