Global stocks fall after China data, UK central bank warning

Global stocks mostly fell on Thursday after Britain's central bank signaled it could consider raising interest rates in coming months and data showed retail sales and industrial output slowing in China.

KEEPING SCORE: Britain's FTSE 100 fell 0.7 percent to 7,328 while France's CAC was flat at 5,219. Germany's DAX fell 0.3 percent to 12,522. Futures augured a tepid start on Wall Street. S&P Futures lost almost 0.1 percent while Dow futures were flat.

UK DILEMMA: The Bank of England kept its key interest rate at a record low of 0.25 percent but signaled that it was uncomfortable with the current high inflation and said rates could rise earlier than markets expect. That pushed the pound up 1 percent on the day, to $1.3336, which in turned weighed on the FTSE 100, as it reduces the overseas earnings of the many multinationals listed on the index. The British central bank is in a dilemma as the high inflation would warrant higher rates, but the weaker economy and slow wage growth suggests it should hold off doing so.

ANALYST TAKE: "We continue to think that GDP growth and domestically-generated inflation will be too weak for the (Bank of England) to raise rates over the next year, but it's clear now that it would not take much of an improvement in either to spark the (bank) into action," said Samuel Tombs, of Pantheon Macroeconomics in London.

CHINA: Earlier, China's National Bureau of Statistics said the world's second-largest economy saw 6 percent annual growth in its industrial output in August, slower than 6.4 percent growth in July. Retail sales expanded 10.1 percent on year in August, compared with 10.4 percent in July, it said. The figures missed expectations and suggested that China's economy continued to cool.

ASIA'S DAY: Japan's Nikkei 225 fell 0.3 percent to 19,807.44. China's Shanghai Composite Index lost 0.4 percent to 3,371.43, while Hong Kong's Hang Seng index fell 0.4 percent to 27,777.20. But South Korea's Kospi gained 0.7 percent to 2,377.66. Australia's S&P/ASX 200 was down 0.1 percent at 5,738.70. Stocks in Southeast Asia were mixed.

DATA WATCH: Investors are also waiting for the latest updates on the U.S. economy before the Federal Reserve meeting due next week. The U.S. Labor Department is scheduled to release reports on consumer prices for August and the number of people who applied for unemployment benefits last week.

OIL: Benchmark U.S. crude added 54 cents to $49.84 per barrel in New York. The contract rose $1.07, or 2.2 percent, to close at $49.30 a barrel on Wednesday. Brent crude, used to price international oils, gained 46 cents to $55.62 per barrel in London. It added 89 cents, or 1.6 percent, to finish at $55.16 a barrel in the previous session.

CURRENCIES: The dollar rose to 110.71 yen from 110.49 yen. The euro rose to $1.1890 from $1.1884.