London midday: BoE adds to gloom

London has lurched lower still after the Bank of England lowered its forecasts for economic growth in 2011 while raising inflation expectations. The Bank is now predicting economic growth of 2.5% in 2011, down from a previous forecast of 3.4%. He predicted that inflation would remain above the 2% target for much of next year.The number of blue chips on the rise has remained steady at five throughout the day. Smiths Group leads the small band of risers as speculation about a break-up continues to simmer, while Holiday Inn owner InterContinental Hotels recoups some of the losses it sustained followed yesterday's trading update, after Panmure Gordon upgraded the stock to "buy" from "hold". Broker comment also supports drinks brands owner Diageo; Barclays Capital has lifted its rating on the Guinness brewer to "equal weight" from "underperform".Ex-dividends are also having an adverse impact. BT and RSA are two stocks trading ex-their last dividend today.The Fed's downbeat view on the pace of recovery in output and employment in the US has hit demand for mining stocks, with Rio Tinto, Vedanta, Kazakhmys and Xstrata the big fallers in the sector.Hot on the heels of TUI Travel's slump yesterday, package tour operator Thomas Cook has warned that full-year profits will be at the low end of forecasts due to softer UK bookings and the weak euro. "As we enter the final quarter, it is apparent that trading in the UK business is softer than expected and, at current rates, the recent weakening of the euro will have an adverse impact on translation of our euro-based earnings," said chief executive Manny Fontenla-Novoa.Standard Life has increased half-year profit in line with forecasts as a big increase in net inflows boosted assets under management. IFRS operating profit before tax from continuing operations rose 10% to £182m and European Embedded Value (EEV) profit grew 11% to £364m. Net inflows soared 71% to a record £5.3bn. Panmure Gordon called the results a good set of figures but said they "could see the gap to our target price narrow further, and we are downgrading from 'Buy' to 'Hold'."Private equity group 3i said the assets in its portfolio continue to perform well operationally and financially, generating good income. Dividends and interest received in the first quarter to 30 June resulted in a cash inflow of £15.2 million.Speciality pharmaceuticals group Shire has agreed to sell its attention deficit hyperactivity disorder (ADHD) treatment Daytrana to Noven Pharmaceuticals.First half profits rose at support services group and building contractor Balfour Beatty despite lower revenues at its core construction businesses. Pre-tax profits rose to £81m from £65m in the half year to June on revenues of £4.6bn, up from £4.39bn as US acquisition Parsons Brinckerhoff kicked in strongly.Legacy software specialist Micro Focus has slumped after it slashed its sales forecasts for this year after a sluggish first quarter and slow licence sales, though earnings guidance is unchanged.Property repair and maintenance company Rok has suspended its CFO with immediate effect after 'serious failings' at its Plumbing Heating & Electrical business, which will bring underlying pre-tax profit for the year significantly below market expectations. Residential property firm Grainger is trading well, despite slowing house price growth in the last few months. The group said £49.4m of residential sales were completed during the four month period to 31 July 2010, taking total sales in the ten months to 31 July to £128.4m. Nautical Petroleum has raised £30.35m from a placing to help fund its planned exploration, appraisal and pre-development activity until the end of 2011, including work on the potentially lucrative Catcher field in the UK Central North Sea.Flowers and gifts retailer Flying Brands has cheered investors with half-year profit in line with expectations and the resumption of dividend payments.Healthcare group Nestor admitted today it has rejected an unsolicited bid approach worth 90p a share in cash from the owners of the AA and Saga. The possible offer, which valued the business at £102m, was made by Acromas Holdings Limited.FTSE 100 - RisersSmiths Group (SMIN) 1,176.00p +2.44%InterContinental Hotels Group (IHG) 1,081.00p +0.28%Imperial Tobacco Group (IMT) 1,808.00p +0.17%Smith & Nephew (SN.) 575.50p +0.17%British Sky Broadcasting Group (BSY) 710.00p +0.07%FTSE 100 - FallersBT Group (BT.A) 139.40p -4.78%Inmarsat (ISAT) 703.50p -4.67%TUI Travel (TT.) 194.30p -4.33%Lloyds Banking Group (LLOY) 72.00p -4.15%ARM Holdings (ARM) 306.00p -3.47%RSA Insurance Group (RSA) 129.50p -3.29%Rio Tinto (RIO) 3,278.00p -3.23%Kazakhmys (KAZ) 1,202.00p -3.14%Xstrata (XTA) 1,021.00p -3.04%Vedanta Resources (VED) 2,407.00p -2.94%