© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo
By Shristi Achar A and Pranav Kashyap
(Reuters) -UK equities edged lower on Tuesday as caution set in ahead of key domestic inflation print and major central bank decisions this week, though losses were limited by strength in Unilever (LON:)’s shares following a decision to spin off its ice cream unit.
The blue-chip FTSE 100 was 0.1% down, as of 0917 GMT.
Investors refrained from placing big bets ahead of key domestic inflation data and the Fed’s rate decision, both due on Wednesday, to ascertain the global monetary policy trajectory. Market focus will later shift to the Bank of England’s (BoE) rate verdict on Thursday.
The BoE is expected to keep rates at current levels in the upcoming meeting, although the focus will be on the timing of the first rate cut. [0#BOEWATCH]
“The UK is heading out of recession so the bank doesn’t need to worry about the necessity of cutting interest rates in order to stimulate growth,” said Danni Hewson, head of financial analysis at AJ Bell.
“The bank will continue with its policy, and it does have a balancing act to do, because now the expectation is that we won’t get as many cuts as we thought.”
The has underperformed its European and U.S. counterparts so far this year, owing to uncertainty over rate cuts and lack of exposure to technology stocks, fuelled by the artificial intelligence frenzy.
Losses on FTSE 100 were limited by a nearly 4% gain in Unilever as the consumer goods group plans to spin off its ice cream unit into a standalone business and cut 7,500 jobs.
The personal care sector index jumped 1%, supported by the strong performance in Unilever’s shares.
The mid-cap edged 0.2% lower, led by a 6.7% fall in Crest Nicholson (LON:) after the British homebuilder said it could build up to 11% fewer homes in fiscal 2024.
The homebuilders sub-index dropped 1.2%.
On the flip side, shares of Close Brothers jumped 11.3% after the lender said it expects to sustain underlying loan book growth in the second half of the year.
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