LONDON MARKETS: U.K. Stocks Slip Ahead Of Rate Decision; Rio Tinto Up

By Carla Mozee, MarketWatch

Miners rise, Old Mutual falls

LONDON (MarketWatch) -- U.K. stocks declined Thursday ahead of a monetary policy decision by the Bank of England, but shares of Rio Tinto PLC outperformed after the mining heavyweight's profit jumped.

The FTSE 100 index lost 0.1% to 6,6301.85. The index fell 0.7% on Wednesday, driven lower alongside other global markets by worries about euro-zone growth and Russia's ongoing conflict with Ukraine.

But Rio Tinto climbed 1.4% as company's first-half profit more than doubled on cost cuts and higher production of iron ore.

Shares of Carnival PLC gained 2.2% after the cruise operator's rating at Bank of America-Merrill Lynch was raised to buy from neutral.

Moving lower were shares of Old Mutual PLC , by 2.8%, following the investment and insurance firm's report that first-half pretax profit fell to 564 million pounds ($949.9 million) from GBP805 million in the same period a year ago.

The Bank of England, led by Governor Mark Carney, is expected to release its latest policy decision at 12 p.m. in London, or 7 a.m. Eastern Time. Policy makers are expected to leave the key interest rate at a record low of 0.5% and make no changes to the 375 billion-pound ($631 billion) asset-purchase program. But investors will watch for any hints that some policy makers will vote for an interest-rate increase.

Kathy Lien, managing director at BK Asset Management, noted Wednesday that a group of independent economists in the U.K. said the Bank of England should raise rates immediately. "[W]hile there's zero chance of a rate hike in August, there's definitely more hawkish chatter that could make its way into next week's [BOE quarterly] inflation report."

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