4:00 PM London – The IMF lifts global growth outlook for 2010 to 4.6%. The Bank of England retains key interest rate of 0.5% and £200 billion bond purchase. The UK manufacturing output recorded biggest growth in May and home prices fell in June.
In London FTSE 100 Index traded higher 66.72 or 1.33% to 5,081.54 and the pound edged lower to close at $1.513 and to close at €1.196.
The International Monetary Fund today lifted its forecast for global economy for the year 2010 to grow at 4.6% compared to its earlier estimate of 4.2%. This revised estimate is the fastest since 2007. The IMF estimated 2011 growth at 4.3%, unchanged from the previous estimate.
The Bank of England today left its key interest rate unchanged at a historic low and maintained the size of asset purchase scheme at £200 billion.
At the end of two-day rate setting meeting, policy makers led by Governor Mervyn King, decided to hold the official bank rate paid on commercial bank reserves at 0.5%. The current rate is the lowest since the central bank was established in 1694.
The Monetary Policy Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The central bank will release the minutes of the meeting on July 21.
UK manufacturing output in May recorded its largest annual expansion in fifteen years led by strong growth in machinery and equipment industries.
Manufacturing output growth accelerated to 4.3% annually in May from 3% in April, according to data released by the Office for National Statistics today. Manufacturing output growth was the strongest since December 1994.
Manufacturing output rose 0.3% in May reversing a revised 0.8% drop in April.
UK industrial production recorded a monthly growth of 0.7% in May, reversing a revised fall of 0.7% in April, according to data released from the Office for National Statistics today. Annual growth in industrial production increased to 2.6% from April''s revised 1%.
Within the total production, mining and quarrying output increased 2.5% with an increase in oil and gas production output of 2.5%. Energy supply output moved up 1.3% on the month, with increases in electricity, gas and water supply output, the ONS said.
The UK home price slump continued in June according to the latest monthly report from Halifax.
The lender said prices fell another 0.6% last month, following a 0.5% monthly decline in May. Halifax said this took the average house price down to £166,203.
The bank said the decline in the housing market was largely due to a surge in the number of properties coming on to the market following the abolition of Home Information Packs.
Ireland''s Finance Ministry raised its economic outlook for 2010 as a jump in exports is expected to boost the domestic economy.
Finance Minister Brian Lenihan announced last night that the gross domestic product is estimated to grow 1% this year in contrast to a 1.3% contraction forecast initially. The minister said that the main driving force of this growth will be exports. However, he noted that, the gross national product may contract 0.75% this year.
The latest official data showed that the economy had emerged from recession and the GDP rose 2.7% sequentially in the first three months of the year after a series of contractions since the first quarter of 2008.
Gainers & Losers
Associated British Foods plc rose 0.6% to 987.00 pence after the diversified international food, ingredients and retail group said that trading for the half year remains on track to deliver very good progress in earnings for the full year.
Revenue in the 16 weeks to June 19 is up 13%, sugar revenues rose 44% and 15% increase in the retail business. Group revenue rose 14% for the 40 weeks to June 19.