LONDON MARKETS: FTSE 100 Steady After Bank Of England Cuts GDP Growth Outlook

BT cutting thousands of jobs; British industrial production shrinks

U.K. stocks were steady Thursday, as the pound fell after the Bank of England cut its economic growth outlook.

The FTSE 100 index edged up 0.1% to 7,392.05, but has searched for firm direction throughout the session on what's been a packed day for investors. Utility and consumer-related shares drove lower, while commodity and financial stocks were higher.

The BOE reduced its in 2017 growth outlook for gross domestic product in the U..K. to 1.9%, from 2%. An increase in exports is expected to help offset the drag on consumer spending from rising prices.

The forecast in the central bank's Inflation Report ( assumes that the U.K. will be able to extricate itself from the European Union without running into roadblocks.

"The MPC's projections continue to be conditioned on a smooth transition to an average of possible outcomes for the U.K.'s post-Brexit trading arrangements," BOE Governor Mark Carney said in a press conference (

The British central bank met widely held expectations in holding its key interest rate at 0.25% ( The vote was 7-1, with board member Kristin Forbes preferring a rate hike. Eight members participated instead of the usual nine, after Charlotte Hogg resigned in March. (

The pound dropped in midday trade after the release of the bank's Inflation Report, monetary policy decision and minutes of its last meeting. A lower pound can aid shares of blue-chip multinational companies that make most of their profit and sales overseas.

Sterling fell to $1.2884, down from $1.2925 just ahead of the BOE release. The pound bought $1.2939 late Wednesday in New York.

BT dividend gloom: Shares of BT (BT.A.LN) (BT.A.LN) stumbled 3%, on track for the biggest drop in two months. The telecommunications company lifted its proposed final dividend by 10%, but was downbeat on the outlook.

The "dividend policy remains progressive but 2017/18 dividend growth [is] to be lower than the 10% previously anticipated," BT said in its fourth-quarter report.

BT also said it will cut 4,000 jobs as part of a restructuring exercise and not pay its chief executive a bonus, as it reported a drop in quarterly pretax profit (

Stock movers: Hikma Pharmaceuticals PLC shares (HIK.LN) sank 6%. The move came ahead of expected decision by the U.S. Food and Drug Administration on whether the company can make a generic version of GlaxoSmithKline PLC's (GSK.LN) Advair asthma medication.

A number of shares were trading ex-dividend, or without divided rights, on Thursday. British Gas parent Centrica PLC (CNA.LN) was down 2.3%, with that stock also hit with a ratings downgrade by J.P. Morgan Cazenove to underweight from overweight. Miner Glencore PLC (GLEN.LN) was up 1.3%, and Glaxo was up 0.9%. Grocer and Argos parent J Sainsbury PLC (SBRY.LN) fell 1%.

Data: A reading on U.K. industrial production showed activity shrank 0.5% in March ( Output on a year-over-year basis rose 1.4%, according to the Office for National Statistics, but that was below market expectations of 1.9% growth. Factory output figures also fell short.

Meanwhile, the country's total trade deficit widened sharply in March, by GBP5.7 billion, as imports of machinery, transport equipment, oil and chemicals increased.

(END) Dow Jones Newswires

May 11, 2017 07:54 ET (11:54 GMT)