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LONDON (Alliance News) - London shares prices ended lower Thursday, led by FTSE 100-listed Inmarsat and with mining stocks under pressure, while the pound took a hit after the Bank of England kept its key rate unchanged at a record low in the first split vote since December.

The FTSE 100 ended down 0.1% at 6,747.09, having eroded earlier losses after the BoE decision. The FTSE 250 closed down 0.2% at 17,745.84 and the AIM All-Share finished down 0.5% at 752.56.

In Europe, the CAC 40 in Paris ended down 0.1% and the DAX 30 in Frankfurt closed down 0.4%.

The BoE's Monetary Policy Committee voted to maintain its bank rate at 0.50% in the policy session that concluded Wednesday, which was the first split vote this year. One of the MPC members, Ian McCafferty, voted to hike the base rate by 25 basis points, meaning the MPC vote was 8-1. Analysts were broadly expecting a 7-2 vote, as they expected MPC member Martin Weale to join McCafferty on supporting a lift of interest rates.

One of the dovish members of the MPC, David Miles, also voted to keep the rates on hold in his final meeting, weeks after he surprised the market by saying that the time for a rate hike is coming closer.

Meanwhile, policymakers unanimously decided to keep its assets purchase target at GBP375 billion.

The central bank for the first time released the minutes of the session along with the monetary policy decision announcement on Thursday.

"On the one hand, moving earlier would allow a more gradual path for interest rates. On the other hand, in an environment of heightened uncertainty, benefits of waiting for more information about the strength of the economy would be greater than usual," the BoE said.

As part of BoE Governor Mark Carney's plan to make policymaking more transparent, the bank simultaneously published the Inflation Report on "Super Thursday".

"Inflation expectations remain well anchored," the central bank said. The MPC judged that demand growth would be sufficient to return inflation to the 2% target within two years. The two-year term inflation outlook was almost unchanged from the prior estimate. The bank forecast 2.8% growth for this year, which is larger than the prior estimate of 2.6%. Growth is forecast to moderate to 2.6% next year, which was unchanged from the May estimate.

The pound declined sharply after the BoE decision, standing at USD1.5611 prior to it. When the European equity markets closed, sterling was at USD1.5508.

In the US, investors are focusing on a potential US interest rate hike from the US Federal Reserve in September. Ahead of the release of nonfarm payrolls data, expected Friday at 1330 BST, first-time claims for US unemployment benefits saw some further upside in the week ended August 1st.

The US Labor Department said in a report that initial jobless claims edged up to 270,000, an increase of 3,000 from the previous week's unrevised level of 267,000. Economists had expected jobless claims to rise to 273,000. With the modest increase, jobless claims climbed further off the more than forty-year low of 255,000 set in the week ended July 18th.

Meanwhile, the less volatile four-week moving average showed a continued decrease, falling to a two-month low of 268,250 from the previous week's unrevised average of 274,750.

When European stock markets closed, Wall Street was lower, with the DJIA down 0.6%, the S&P 500 down 0.8% and the Nasdaq Composite down 1.5%.

On the London Stock Exchange, some mining stocks were amongst the worst performers in the FTSE 100. BHP Billiton, down 3.1% , Anglo American, down 2.8%, Glencore, down 2.0%, Antofagasta, down 1.9%, came under pressure as some analysts warn that dividends in the sector could be at risk.

"Commodity prices have been falling for the past four years and mining shares are currently sitting at six-year lows," said Charles Stanley analyst Garry White. "Concerns about future growth in the Chinese economy, a glut of supply following over-investment during the boom years and the rise of the dollar are the three main causes."

Rio Tinto, BHP Billiton and Glencore had risen sharply on Wednesday after Liberum upgraded the miners to Hold from Sell. However, the broker said it expects mining fundamentals to continue to deteriorate into the second half of the year.

Rio Tinto shares rose 0.3% Thursday. The miner reported a pretax profit of USD1.74 billion in the first half of 2015, less than a third of the USD6.09 billion profit made a year earlier, as revenue fell to USD17.98 billion from USD24.33 billion. However, Rio's results and interim dividend beat analysts expectations.

The FTSE 100-listed miner also continued to slash costs, cutting its capital expenditure budget in 2015 and 2016, alongside increasing its cost-saving target by USD250 million for the 2015 full year.

Randgold Resources, up 0.1%, said its pretax profit fell in the first half of 2015 due to lower gold prices and higher costs but said its results stood strong against a sector "buckling under the pressure of the gold price downturn". The gold miner reported a pretax profit of USD72.0 million in the second quarter of 2015, falling from a USD92.1 million profit a year earlier, as revenue dropped to USD285.0 million from USD294.9 million.

Gold prices were firm at the London close after its recent drop last month. The yellow metal was at USD1,089.80.

Outside mining, Inmarsat was the best blue-chip performer, up 6.7%. The satellite communications company said its pretax profit declined in the first half of 2015 following a sluggish second quarter, which was hit by delays to the launch of its third Global Xpress satellite and to the launch of its GX global commercial service.

The company said its pretax profit was USD165.9 million in the first half, down from USD168.3 million a year before, as revenue fell to USD616.2 million from USD652.3 million. Inmarsat did sweeten the message for investors, however, with a 5% hike to its interim dividend to 19.61 US cents from 18.68 cents a year earlier.

Anglo-South African financial services company Old Mutual ended up 4.9%. The company reported a 19% increase in adjusted operating profit for the first half of 2015, and increased its interim dividend by 8%.

It said its adjusted operating profit amounted to GBP904 million in the six months to the end of June, a 20% increase at constant currency. Old Mutual increased its interim dividend to 2.65 pence from 2.45p. Funds under management increased to GBP335.7 billion, up 5% on a reported basis and by 7% at constant currency.

Oil giant BP was amongst the biggest decliners in the FTSE 100, down 3.0%, after going ex-dividend, meaning new buyers no longer qualify for the latest dividend payout. The stock also has been hit by another fall in oil price, with Brent hitting a low of USD49.33 a barrel, while US benchmark West Texas Intermediate set a new four month low of USD44.80 a barrel.

In a very light corporate calendar Friday, bookmaker William Hill releases half-year results and housebuilder Bellway issues a trading statement.

Also in the economic calendar, Bank of Japan monetary policy statement is due at 0400 BST, German industrial production is due at 0700 BST and UK Goods Trade Balance is due at 0930 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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