© Reuters. FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain, August 24, 2015. REUTERS/Suzanne Plunkett/File Photo
By Devik Jain
(Reuters) – London’s edged higher on Thursday, boosted by heavyweight consumer staple stocks and positive earnings updates from Next and Melrose Industries, while investors eyed Bank of England’s policy decision and local and regional elections.
The blue-chip index rose 0.2%, with fashion retailer Next gaining 2.6% as it raised its profit outlook for the 2021-22 year for the second time in two months.
Engineer Melrose climbed 1.8% after it said it was performing “modestly” ahead of expectations, with operating margins in the first quarter improving faster than expected.
The domestically focused mid-cap advanced 0.5%.
The BoE is expected to raise 2021 GDP forecast sharply from its previous estimate of 5% growth at 1100 GMT, and it might start to slow its pandemic emergency support as the country’s economic recovery accelerates.
“The question, of course, is when would the tapering occur – if it occurs this year and next year, it might be conditional on; for example inflation target or some other target going forward, so no hurry,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.
“This is a strong cyclical recovery, but they have no reason to push on the acceleration button in the short term, they might want to signal that they will eventually do so.”
After rising more than 9% year-to-date on optimism about a stronger economic reopening from pandemic-driven recession last year, the FTSE 100 has traded in a tight range since April on concerns central banks might pull their monetary support sooner than expected as inflation rises.
Voters in England, Scotland and Wales head to the polls on Thursday in a series of different elections, with a focus on Scotland where an outright majority for the pro-independence Scottish National Party could trigger a showdown with Boris Johnson’s government.
Among other stocks, insulation products maker Morgan Advanced Materials jumped on confident annual sales outlook.
Britain’s largest homebuilder Barratt Developments (LON:) added 1.3% after it forecast wholly-owned annual home completions ahead of its previous estimates, as the sector benefits from government measures and low interest rates.
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