The broad indices ended mixed, after China's government said the country's exports grew by 10.6% and its grew by 10% year-over-year during January. Those are very impressive figures, considering that other recent reports had indicated slowing manufacturing growth in China, as well as in the United States.
The KBW Bank Index (I:BKX) was down 0.2% to 68.37, with the 24 index components evenly split between winners and losers. The index has pulled back 1% this year, following a gain of 35% during 2013.
The Bank of England on Wednesday said it had increased its forecast of the GDP growth in the United Kingdom for 2014 to 3.4% from the previous estimate of 2.8%. It also said inflation in the UK had returned to the bank's target of an annual rate of 2%, and that the nation's unemployment rate was expected to improve to 7.0% "by the spring." That level of unemployment was the threshold the Bank of England's policy committee had previously set before considering raising its Bank Rate from the current interest rate of 0.5%.
BOE governor Mark Carney said in prepared remarks that despite "exceptionally strong jobs growth," productivity growth was "disappointing," and that "there is greater slack in the labor market than we would have expected."
Carney went on to say that "as yet the recovery is neither balanced nor sustainable. A few quarters of above trend growth driven by household spending are a good start but they aren't sufficient for sustained moment." Therefore, the BOE is unlikely to raise the Bank Rate near term, as the BOE's policy committee is "seeking to absorb all the spare capacity in the economy over the next two to three years."