UK's FTSE index ends flat; little reaction to BoE rate decision

The UK's FTSE 100 share index ended virtually flat on Thursday, although mining stocks fell as base metal prices slumped on China growth concerns.

The Bank of England raised its bank rate for the 12th consecutive time but its decision had been expected and had little impact on the stock market.

The blue-chip FTSE 100 UK100 closed down just 0.1%, after briefly reaching its lowest level in five weeks, while the FTSE 250 midcap index (.FTMC) ended down 0.04%.

Industrial metal miners (.FTNMX551020) slid 3.2%, hitting an eight-month low as copper and other base metal prices dropped after China's consumer prices rose at the slowest pace in more than two years in April, while factory gate deflation deepened.

The BoE raised its key interest rate by 25-basis points to 4.5% and made the biggest improvement to its growth projections since it first published forecasts in 1997.

Craig Erlam, senior market analyst at Oanda, said that while the central bank's decision to increase its forecasts came as a surprise, it didn't change people's views.

"The market is in a wait and see movement and we've got to wait for more data to confirm which direction of trouble we're headed in."

British gilt yields (GB10YT=RR), (GB30YT=RR) slipped, while bank stocks (.FTNMX301010) fell 0.8%.

Energy stocks (.FTNMX601010) slipped 1.0% following a slump in oil prices.

Europe's largest bank HSBC HSBA and energy giant BP BP. lost 1.2% and 1.9% respectively as they were trading without the entitlement for dividend.

Helping cut losses were gains in defensive stocks like healthcare major AstraZeneca AZN and consumer staples company Unilever ULVR.

The London-based FTSE stock indexes have hit shaky ground in May following a rebound in April, as uncertainty over the outlook for interest rates and a mixed bag of corporate earnings dented investor sentiment.

British engine maker Rolls-Royce RR. said its new CEO's plan to boost the company's profitability was moving "at pace".

Its shares however, fell 6.7% with one analyst saying it was due to disappointment over the lack of an upgrade to the outlook.