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* BoE sees case for rate rise
* Rolls-Royce at 6-month high on target price hike
* Mitchells & Butlers gains on strong sales
* FTSE 100 down 0.07%, FTSE 250 adds 0.2%
(Updates to close)
By Shashank Nayar
Sept 23 (Reuters) - The UK's blue-chip FTSE-100 index was
little changed on Thursday, coming under pressure from a
stronger pound after the Bank of England said the case for
higher interest rates had strengthened.
The internationally focussed FTSE-100 ended down
0.07% after having gained as much as 0.7% earlier in the session
as the dollar earners in the index took a hit from sterling's
strong gains.
The domestically focussed mid-cap index climbed
0.2%. Both UK indexes lagged a broader rally in European markets
on easing concerns about cash-strapped developer China
Evergrande.
The BoE nudged up its forecast for inflation at the end of
the year to over 4%, more than twice its target rate. While the
central bank expects the overshoot to be temporary, two
policymakers called for an immediate halt to the 895 billion
pound ($1.23 trillion) bond purchase programme.
"Looking ahead, we expect the Bank of England to be the
first major central bank to achieve interest rate lift-off in
the first half of next year," Ambrose Crofton, global market
strategist at J.P. Morgan Asset Management.
The U.S. Federal Reserve said on Wednesday it would likely
begin reducing its monthly bond purchases as soon as November
and signalled interest rate increases might follow more quickly
than expected.
Rate-sensitive banking stocks such as Barclays,
Standard Chartered and Natwest Group rose
between 0.8% and 1.5%, helped by a jump in benchmark bond yields
.
Aero engine and automobile maker Rolls-Royce jumped
3.5% to a six-month high and was the top FTSE 100 gainer after
Berenberg raised its target price.
London-listed shares of South Africa-based financial
services group Investec gained 3.4% after it said it
expected an up to 114% rise in half-year profits.
Britain's Mitchells & Butlers Plc rose 1.8% after it
said sales over the past two months had been above pre-pandemic
levels.
(Reporting by Shashank Nayar and Devik Jain in Bengaluru;
Editing by Toby Chopra and Bernadette Baum)
