ONDON: Britain’s top share index hit a seven week high in cautious trading ahead of the European Central Bank’s (ECB) policy meeting at which it is likely to announce a government bond buying scheme to try to boost the region’s economy.
A euro zone source said on Wednesday the ECB’s Executive Board has proposed that the bank should buy 50 billion euros ($58 billion) in bonds per month from March – the last big policy tool for breathing life into the flagging euro zone economy and fending off deflation.
The blue chip FTSE 100 index was up 0.3 per cent at 6,748.56 points by 1115 GMT after rising to 6,750.65 points, the highest level since early December.
John Smith, senior fund manager at Brown Shipley said it is likely that the ECB measures are discounted and we might see an initial rally on the confirmation, but then a sell-off.
Expectations of the ECB’s quantitative easing program, printing money to purchase the sovereign bonds, have helped the benchmark index to advance for a sixth straight session. The index is up nearly 3 per cent so far this week.
The ECB’s 25 member policymaking Governing Council will discuss the proposal later in the day before the central bank President Mario Draghi holds a news conference at 1330 GMT.
Among the main individual movers, Royal Mail rose 4.4 percent, the top gainer in the FTSE 100, after saying group revenue for the nine months to Dec. 28 rose 1 per cent, marking a slowdown from the half year as an improved parcels performance was offset by lower letter volumes.
