LONDON MARKETS: FTSE 100 Gains As SABMiller Rises; Pound Falls As U.K. Growth View Cut

By Carla Mozee, MarketWatch

Bank of England cuts GDP forecast

U.K. stocks rose Wednesday, with shares of brewer SABMiller PLC among those moving higher following financial results.

But the pound turned lower after the Bank of England, in its quarterly inflation report, cut its economic growth forecasts for 2015 and 2016, citing strength in the pound and sluggish productivity among the reasons for the downgrades.

Sterling: The British currency (GBPUSD) fell to $1.5638 from $1.5673 late Tuesday, after the central bank said it now expects gross domestic product to expand by 2.5% in 2015, and by 2.6% in 2016. That compares with its previous forecasts of 2.9% growth (http://www.marketwatch.com/story/bank-of-england-cuts-uk-growth-forecasts-2015-05-13-54854621) for this year and next.

Before the BOE's update, the pound had hit a fresh yearly high of $1.5745 following the release of monthly U.K. jobs data. The Office for National Statistics said the unemployment rate fell to 5.5% in the three months to March, from 5.6% in the three months to February. Average wage growth, including and excluding bonuses, came in ahead of expectations. Read: U.K. wage growth picks up, job market strengthens (http://www.marketwatch.com/story/uk-wage-growth-picks-up-job-market-strengthens-2015-05-13)

Stocks: The FTSE 100 remained higher after the BOE and jobs reports, rising 0.6% at 6,975.92, as consumer-goods and industrial shares gained. The London benchmark on Tuesday fell 1.4% (http://www.marketwatch.com/story/ftse-100-under-pressure-with-easyjet-sliding-2015-05-12), its biggest decline since late March.

SABMiller (SBMRY) shares bounced up 2.2% as the maker of Miller Genuine Draft, Peroni and other brands said annual net producer revenue came in at $26.29 billion, up 5% from the year-earlier period (http://www.marketwatch.com/story/sabmiller-annual-profit-dips-on-currency-weakness-2015-05-13), generally in line with analysts' expectations. Profit, however, dipped to $3.30 billion on currency weakness against the dollar.

"Trading conditions will continue to be challenging in light of the significant currency gyrations we can expect to witness over the coming months," wrote Brenda Kelly, analyst at London Capital Group. "The increase in the dividend by 8% to $1.13 per share should help offset any weakness in future capital gains for investors."

Barratt Developments PLC climbed 4% as the home builder said it expects housing completions for the full year to be ahead of previous guidance (http://www.marketwatch.com/story/barratt-sees-housing-completions-to-top-guidance-2015-05-13).

Mondi PLC zoomed to the top of the FTSE 100, charging up 10% after the packaging and paper company posted a 29% rise in underlying operating profit (http://www.marketwatch.com/story/mondi-underlying-operating-profit-rises-2015-05-13) to 236 million euros ($295 million) during the quarter ended March 31.

Decliners included Admiral PLC , with shares down 1.6%. The insurer said Chief Executive Henry Engelhardt will step down next year after 24 years in the role. Chief Operating Officer David Stevens will succeed Engelhardt.

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