FTSE Edges Higher Despite Weak GDP Data
(RTTNews) - U.K. stocks rose on Wednesday as investors reacted to mixed signals from the Bank of England on bond purchases.
The pound has risen slightly after media reports indicated that the Bank of England is considering an extension to emergency bond-buying program when it ends on Friday.
The Financial Times reported that BoE Governor Andrew Bailey has signaled the likelihood of extending bond buying program to prevent volatility in the market.
The report came after a warning from the BoE chief that the central bank would stop buying bonds that could put some pension schemes in trouble.
"You've got three days left now and you've got to sort it out," Andrew Bailey told pension funds on Tuesday.
Meanwhile, investors shrugged off data showing that the U.K. economy contracted unexpectedly in August on weak services and industrial production.
GDP shrank 0.3 percent month-on-month, in contrast to the revised 0.1 percent growth in July. GDP was forecast to remain flat after July's initially estimated growth of 0.2 percent.
On a yearly basis, GDP expanded at a slower pace of 2.0 percent after climbing revised 3.1 percent in July. This was also slower than economists' forecast of 2.4 percent.
The benchmark FTSE 100 was up 27 points, or 0.4 percent, at 6,912 after falling 1.1 percent on Tuesday.
Housebuilder Barratt Developments slumped 4.2 percent after a warning that it is preparing for tougher times ahead. Persimmon fell 2.9 percent and Bellway gave up 2.2 percent.
Recruiter Page Group added 1.5 percent after posting a jump in third-quarter gross profit.
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