By Carla Mozee, MarketWatch

Pound falls on BOE economist's rate comments

LONDON (MarketWatch) -- U.K. stocks turned lower Thursday, with Next PLC shares dropping from their all-time high after the apparel retailer took a cautious tone in its financial update.

The FTSE 100 lost 0.2% to 6,930.87, in part as consumer-goods shares fell into the red. The index had earlier been cruising above its record high of 6,961.14 (http://www.marketwatch.com/story/ftse-100-wobbles-as-aviva-rises-admiral-falls-boe-statement-on-tap-2015-03-05). On Wednesday, the FTSE 100 rallied after the governing U.K. coalition outlined its 2015 budget plans.

On Thursday, apparel retailer Next PLC was at the bottom of the FTSE 100. Shares fell 3.6% as the company said it remains "very cautious in our sales budgets" (http://www.marketwatch.com/story/next-cautious-for-current-year-despite-profit-rise-2015-03-19-44851037) although the consumer economy looks benign. "Whilst we are happy with most of our current product ranges, we recognize that some collections are not as strong as they were at this point last year," Next said in a statement.

Full-year profit at Next rose to 634.9 million pounds ($936.5 million) from GBP553.2 million a year ago. Sales in the most recent period rose to GBP4 billion from GBP3.74 billion.

Next shares closed at an all-time high on Wednesday at GBP76.20, according to FactSet data.

Credit Suisse said Next's comments about its sales budgets and collections "is a surprise" as it had only "expected the tone of the outlook statement to be somewhat muted in terms of the UK macro outlook, but not on execution." The broker said it remains neutral on Next.

Retailer Marks & Spencer PLC , whose offerings include apparel and accessories, was up 2.2%.

Also pulling lower on Thursday was British American Tobacco PLC , falling 1.3% as its shares traded without dividend rights.

But advancers on the blue-chip index included mining shares, benefitting as metals prices moved higher in the wake of an overnight drop in the dollar (DXY) . Shares of miner Fresnillo PLC rose 5.1%, Randgold Resources Ltd. gained 3% and Antofagasta PLC rose 1.8%.

The dollar has dropped as investors were considering the Federal Reserve's policy statement and the prospect that U.S. interest rates may stay low for longer period. The dollar has recovered ground against major rivals on Thursday (http://www.marketwatch.com/story/dollar-recoups-some-post-fomc-losses-against-yen-euro-2015-03-19).

Meanwhile, the pound (GBPUSD) fell below $1.48 after the Bank of England's Chief Economist Andrew Haldane suggested a rate cut may be needed to fend of the risks of deflation. The pound was buying $1.4759, down from $1.4980 late Wednesday.

If a policy change "were required, given the asymmetry of inflation risks, I think the chances of a rate rise or cut are broadly evenly balanced," Haldane said in prepared remarks for a speech at the Biz Club in Rutland. "In other words, my view would be that policy may need to move off either foot in the immediate period ahead, depending on which way risks break."

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