By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K. stocks headed for their first rise
in three days on Thursday, with Barclays leading advancers after a
strategy update. Investors are also waiting for the latest policy
decision from the Bank of England.
The FTSE 100 index picked up 0.5% to 6,828.32, on track for its
highest close since late February.
Shares of Barclays (BCS) topped the list of gainers, rising 5.6%
after the U.K. bank presented its strategy update. Barclays plans
to ax 7,000 jobs at its investment bank over the next two years and
to create a "bad bank" division consisting of 115 billion pounds
($195 billion) of risk-weighted assets.
Other banks were also higher, with shares of Royal Bank of
Scotland Group PLC (RBS) up 2% and Lloyds Banking Group PLC (LYG)
rising 0.7%. Sector heavyweight HSBC Holdings PLC (HSBC) slipped
0.3%, adding to a 1.3% loss from Wednesday when the bank reported a
fall in profit and revenue for the first quarter.
At noon in London, or 7 a.m. Eastern Time, the Bank of England
will release its latest monetary-policy decision. Most economists
expect the central bank to keep interest rates at a record low of
0.5% and make no changes to its 375 billion pound ($635.8 billion)
asset-purchase program.
Since the last BOE meeting, the U.K. unemployment rate has
dropped below 7%, which -- according to the bank's initial
forward-guidance framework from August -- was the threshold for
policy makers to consider raising interest rates. However, in
February the BOE introduced an updated interest-rate framework and
said it would focus on a wider range of economic indicators rather
than just the joblessness rate. Most economists now expect the
first 25-basis-point rate hike to come in 2015.
"The inflation report next week will be much more interesting,
as it could signal a shift towards an earlier rate hike, in light
of the recent strong data," analysts at Danske Bank said in a note.
The U.K. inflation report is scheduled for publication on
Wednesday.
Among other movers in London, shares of BT Group PLC (BT) picked
up 2.7% after the telecom company posted a rise in fourth-quarter
profit despite lower revenue, as its sports TV channels boosted
business.
On a more downbeat note, shares of Sage Group PLC slid 5.4%
after the software firm said Chief Executive Guy Berruyer will
retire, leaving no later than March 31, 2015. The company said it
swung to a pretax profit in the half year ended March 31.
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