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Miners push FTSE down 0.2 pct after BoE rate review

Published 06/04/2009, 07:47 AM
Updated 06/04/2009, 07:56 AM
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* FTSE falls 0.2 percent after BoE news

* BoE keeps rates steady, maintains asset purchases

* Miners lead fallers

By Catherine Bosley

LONDON, June 4 (Reuters) - Britain's top share index drifted 0.2 percent lower at midday on Thursday, weighed down by mining shares and reversing earlier gains after the Bank of England left interest rates unchanged and said it would continue asset purchases.

At 1134 GMT the benchmark FTSE 100 index was down 8.21 points at 4,375.21. The blue-chip index closed 96.60 points or 2.1 percent lower on Wednesday at 4,383.42.

"We are yet to see conclusive proof of low interest rates and quantitative easing improving the health of the economy," said Rob Pike, head of trading at ShortsandLongs.

"People are still concerned about losing their jobs and confidence in the economy needs to improve vastly."

The Bank of England left interest rates unchanged at a record low of 0.5 percent for the third month running and said it would continue its 125 billion pound asset-buying programme to tackle recession.

Heavyweight miners were the biggest drag on the index, shaving off 12 points, with BHP Billiton, Xstrata and Anglo American dropping between 1.9 and 3.1 percent.

Banks also fell, weighed down by HSBC, off 1.0 percent and Standard Chartered down 0.6 percent. Barclays, Lloyds Banking Group, and Royal Bank of Scotland, however, gained 1.8-2.7 percent.

Shares in utility companies, media, and mobile telecoms also fell.

The European Central Bank announces its interest rate decision at 1145 GMT. It is expected to keep rates at 1 percent, with the market keen to see detail of its covered bond purchase plan. (Editing by Jon Loades-Carter)

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