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BCN-20
MARKETS-EUROPE-OPEN
European stock markets drop before UK rate call
LONDON, Feb 7, 2019 (BSS/AFP) – European stock markets declined at the
start of trading on Thursday, as caution prevailed before a key interest rate
decision from the Bank of England.
In initial deals, London’s benchmark FTSE 100 index lost 0.2 percent at
7,155.53 points compared with Wednesday’s closing level.
In the eurozone, Frankfurt’s DAX 30 index sank almost 0.6 percent to
11,262.84 points on festering worries over the German economy, while the
Paris CAC 40 index shed nearly 0.1 percent to 5,075.75.
Later on Thursday, at 1200 GMT, the Bank of England will unveil the
outcome of its latest monetary policy committee meeting.
However, analysts expect BoE policymakers to keep the central bank’s key
lending rate at 0.75 percent amid increasing signs Brexit uncertainty is
weighing on economic activity.
“It’s set to be an important day for the pound today as the Bank of
England gets set to meet for its latest rate decision and quarterly look at
the UK economy,” noted CMC Markets analyst Michael Hewson.
“Given the weakness seen in some of the recent (data), it is hard to
imagine that there will be any surprises.”
Output in Britain’s dominant service sector almost ground to a halt in
January, data showed this week, as the nation braces to leave the European
Union at the end of March.
The IHS Markit/CIPS UK services purchasing managers’ index fell to 50.1 —
its lowest level in two and a half years — down from 51.2 a month earlier. A
reading above 50 indicates growth.
Concerns about Britain’s impending departure from the European Union
dampened demand and caused firms to delay making decisions on new projects.
The news followed disappointing purchasing managers’ index (PMI) readings
for the both manufacturing and construction sectors in January.
BSS/AFP/HR/1450