- FTSE closes down 23.83 at 6,755.48
- BoE's MPC votes 7-2
- Focus turns to Fed minutes
techMARK 2,796.77 -0.15%
FTSE 100 6,755.48 -0.35%
FTSE 250 15,748.92 -0.92%
London's blue chips dropped into the red on Wednesday, hit by a combination of Bank of England (BoE) minutes, ex-dividends, and a degree of profit taking.
The FTSE 100 closed 23.83 points lower at 6,755.48.
The BoE's Monetary Policy Committee (MPC) voted 7-2 in favour of maintaining interest rates, surprising the consensus, which had expected a unanimous decision.
The release of minutes from the August meeting showed evidence of the first dissent since Mark Carney became Governor, with external members Martin Weale and Ian McCafferty both voting for a rate change.
"The votes are a little dated given that earnings and inflation data has weakened since the MPC meeting so there is some chance that the votes will be a one-off or that no other members will dissent at the next meeting," CMC market analyst Jasper Lawler said.
"The lower inflation and earnings growth cast doubt over the significance of the votes and a rate-hike this year still seems unlikely, but central banks typically work off a longer timeframe than just one month's data so there is clearly a change of mood at the BoE."
Over in the States, investors are awaiting the minutes of the latest meeting of the Federal Reserve, potentially offering clues on its first interest rate rise.
In July, the Fed announced it would cut a further $10bn off monthly bond purchases and maintain interest rates at 0.25%. The US central bank has indicated that it sees no immediate need to lift rates, saying that the labour market still has room to grow.
"While I don't think that we'll see a rate hike until the end of the first quarter of next year, at the earliest, given Chairwoman Janet Yellen's very dovish stance, and the similar stance of most of the committee, two or three votes in favour of raising rates could cause quite a stir in the markets," said Alpari UK analyst Craig Erlam.
Factory orders in Britain grew faster than expected in August
A rise in overseas demand meant British factory orders grew faster than expected in August, the Confederations of British Industry (CBI)' s industrial trends survey found.
The total order book balance for the CBI rose of nine points, going from +2% in July to +11% in August, exceeding the forecast of a rise to +4% and rising well above their long-run average of -16%.
"The outlook for UK manufacturers remains healthy. Despite a dip in the pace of output growth, companies expect a strong pick-up in the next three months," said CBI deputy director general, Katja Hall.
In other news, the number of people in self-employment rose to 4.6m, its highest level in 40 years, according to the Office for National Statistics.
One of Wednesday's biggest fallers was building materials group CRH, which has seen shares
fall since delivering its interim results on Tuesday morning. The company said the sector has had an "encouraging" start to the year, but that it had been trading against a backdrop of "modest, if mixed recovery" across its main markets. It also said that trading in America had been affected by severe weather conditions for the second successive year.
British American Tobacco and Mondi were both notable fallers after going ex-dividend.
With risk appetite declining, the likes of United Utilities were gaining ground thanks to their status as a haven.
Meanwhile, mining and trading giant Glencore saw its shares move marginally higher after it reported an 11% increase in its interim dividend and unveiled a $1bn share buyback after profits rose in the first half of 2014.
Fellow miners Rio Tinto and Anglo American were also lower.
Renewed concerns about an interest-rate hike this year dampened the demand for housebuilding and construction stocks, as investors worried about the potential impact from policy tightening on the housing market.
Meanwhile, another takeover rejection by infrastructure specialist Balfour Beatty sent shares in the FTSE 250 constituent firmly lower.
FTSE 100 - Risers
United Utilities Group (UU.) 890.00p +1.60%
Royal Mail (RMG) 445.70p +1.57%
Rio Tinto (RIO) 3,458.00p +1.27%
AstraZeneca (AZN) 4,285.00p +1.10%
Anglo American (AAL) 1,594.00p +0.98%
Coca-Cola HBC AG (CDI) (CCH) 1,365.00p +0.89%
SSE (SSE) 1,517.00p +0.80%
International Consolidated Airlines Group SA (CDI) (IAG) 344.20p +0.76%
BHP Billiton (BLT) 1,979.00p +0.71%
Meggitt (MGGT) 469.60p +0.66%
FTSE 100 - Fallers
CRH (CRH) 1,373.00p -3.85%
3i Group (III) 381.60p -2.65%
Barratt Developments (BDEV) 359.60p -2.44%
Associated British Foods (ABF) 2,826.00p -2.38%
Hammerson (HMSO) 601.50p -2.12%
Persimmon (PSN) 1,323.00p -2.00%
Mondi (MNDI) 1,004.00p -1.86%
British American Tobacco (BATS) 3,517.50p -1.79%
Experian (EXPN) 1,027.00p -1.63%
Sainsbury (J) (SBRY) 306.90p -1.60%
FTSE 250 - Risers
FirstGroup (FGP) 126.70p +6.11%
Hochschild Mining (HOC) 166.00p +3.75%
AL Noor Hospitals Group (ANH) 1,100.00p +2.04%
Diploma (DPLM) 668.50p +1.91%
Morgan Advanced Materials (MGAM) 330.00p +1.54%
Debenhams (DEB) 65.45p +1.47%
Keller Group (KLR) 879.00p +1.27%
Rightmove (RMV) 2,486.00p +1.18%
Croda International (CRDA) 2,222.00p +1.00%
Genus (GNS) 1,141.00p +0.97%
FTSE 250 - Fallers
Balfour Beatty (BBY) 238.90p -6.68%
Hikma Pharmaceuticals (HIK) 1,692.00p -6.21%
Berkeley Group Holdings (The) (BKG) 2,426.00p -6.08%
Perform Group (PER) 202.30p -5.51%
Xaar (XAR) 547.00p -5.28%
Brewin Dolphin Holdings (BRW) 280.20p -3.98%
Fisher (James) & Sons (FSJ) 1,336.00p -3.82%
COLT Group SA (COLT) 141.20p -3.62%
Thomas Cook Group (TCG) 124.00p -3.35%
Soco International (SIA) 432.00p -3.07%