By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K.'s FTSE 100 index dropped on
Wednesday after the Bank of England said all members voted in favor
of leaving both interest rates and its quantitative-easing program
unchanged.
The benchmark lost 0.4% to 6,530.32, after trading in positive
territory earlier in the day.
The index reversed in midmorning trade after the U.K.'s central
bank said all nine members at the July meeting agreed to keep its
asset purchases at 375 billion pounds ($566 billion), marking a
shift from the previous meetings. In June, three members, former
Governor Mervyn King, Paul Fisher and David Miles, had voted in
favor of increasing the bank's easing program by $25 billion to a
total of $400 billion.
The pound (GBPUSD) jumped after the release, trading as high as
high as $1.5245, up from $1.5115 on Tuesday.
Banks were on the decline. Shares of Royal Bank of Scotland
Group PLC (RBS) lost 1.2%, Standard Chartered PLC dropped 0.6% and
Barclays PLC (BCS) dropped 0.4%.
Among other notable movers, shares of Smiths Group PLC gave up
2.6% after the engineering company warned operating profit likely
will fall below current expectations.
Shares of Unilever PLC (UL) lost 2.3% in London after Credit
Suisse cut the consumer-goods firm to underperform from
neutral.
On a more upbeat note in London, mining firms posted some of the
biggest gains, after sector major BHP Billiton PLC (BHP) said iron
ore production hit a record high in its past financial year. Shares
rose 1.6%.
Antofagasta PLC added 0.8%, Anglo American PLC picked up 1.4%
and Rio Tinto PLC (RIO) gained 0.8%. Metals prices were, however,
mostly lower.
On Tuesday, Rio Tinto also posted record output of iron ore,
which helped send the sector higher.
On the data front in London, the Office for National Statistics
said the unemployment rate for March to May fell to 7.8%, down 0.2
percentage points from December to February. Additionally, data
showed jobless claims in June fell by the biggest amount in three
years.
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