LONDON: U.K. stocks closed stronger on Wednesday, with SABMiller PLC and Pearson PLC climbing following business updates.
Meanwhile, the pound slipped as two Bank of England hawks dropped their calls for an interest-rate increase.
Also contributing to the positive backdrop for equities, reports on Wednesday said the European Central Bank could spend $58 billion a month on bond buys. Investors are fixated on Thursday’s ECB meeting, at which it’s broadly expected to announce a big boost to its asset-purchase program to stimulate lackluster growth in the region.
The FTSE 100 UKX, +1.63% closed with a gain of 1.63%, scoring a fifth consecutive advance.
Stocks held to higher ground after the U.K. unemployment rate fell to 5.8%, the lowest level in six years. They remained higher after January minutes from the Bank of England showed two policy makers — Martin Weale and Ian McCafferty — dropped their calls for raising the benchmark interest rate. That meant all nine members opted to keep the rate at a record low 0.5%, keeping expectations for a rate hike pushed back to later this year or 2016.
The bank’s message appears to be that it “will not seriously contemplate raising rates until the downside risks to the medium-term inflation outlook have passed, which implies that it will be watching inflation expectations and pay growth, as well as the prevailing inflation numbers, even more closely than usual,” Investec Chief Economist Philip Shaw wrote in a note Wednesday.
Among individual stocks, Pearson PLC PSON, +4.85% gained after the education specialist and publisher said it expects full-year results to come in line with its previous forecast. SABMiller SAB, +2.96% advanced as the brewer said its third-quarter revenue increased 4%. The company did note that lager volumes fell 1%, citing unfavorable weather in China as a reason for the decline.
But shares of Sports Direct International PLC SPD, -5.79% fell following reports that founder Mike Ashley is selling a 2.7% stake in the retailer, reducing his holding to 55%.
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