UK Stocks Rally On Earnings; BOE Warns Of Inflation Risks

(RTTNews) - The U.K. stock market's benchmark index FTSE 100 climbed to a fresh record high Thursday morning and hovered slightly below that mark in early afternoon trades with investors digesting the Bank of England's policy announcement in addition to reacting to spate of corporate earnings updates.

Worries about Middle East tensions appeared to be limiting market's upside.

The Bank of England has kept UK interest rates on hold as it warned that a further escalation in the Iran war could drive inflation above 4% next year, adding to cost-of-living pressures on households.

Against a volatile backdrop in the Middle East conflict, the Bank's monetary policy committee voted by six to three to keep its key base rate at the current level of 3.75%.

The FTSE 100, which climbed to a new high of 10,981.36, was up 40.13 points or 0.37% at 10,948.54 nearly an hour past noon.

Miners Anglo American Plc, Antofagasta, Endeavour Mining, Fresnillo and Rio Tinto gained 3.3%-4.4%. Glencore moved up 2.5%.

Rolls-Royce Holdings rallied 5.2% after the engineering company raised its full-year profit forecast after delivering strong operational and financial performance for the first half of the year.

Standard Chartered advanced 3.2%. Investec, Croda International, Halma, Barclays, Diploma, Informa, Lion Finance, St. James's Place, Howden Joinery Group, IAG, HSBC Holdings and Prudential gained 1.8%-2.7%.

Lloyds Banking Group gained 1.8%. The lender revealed plans to cut costs, raised its interim dividend and announced a fresh £1bn share buyback after reporting a 23% jump in half-year profit.

Energy giant Shell rose about 1% after more than doubling its second-quarter profit. BAE Systems gained 1.7%. After a strong first half, the defense contractor upgraded its sales, profitability and cash flow targets for the year.

Rentokil Initial tanked nearly 17%, as the company issued a cautious outlook despite meeting profit expectations.

LSEG drifted down 4%. Relx, The Sage Group, Imperial Brands, British American Tobacco, Haleon, AstraZeneca, Experian, GSK, 3i Group, Unilever, Reckitt Benckiser and Pearson shed 1%-3%.

Data from the Society of Motor Manufacturers Association showed UK car production dropped 1.2% year-on-year to 68,200 units in June, reversing a 3.2% rise in May.