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By Carla Mozee, MarketWatch

Next shares drop after update; retail sales climb in August

U.K. stocks gained ground Thursday, advancing as supermarkets shares rose, while a fall in the pound after the Bank of England's policy remarks aided some shares of multinationals.

The FTSE 100 was up 0.3% at 6,691.67, after darting in and out of positive during the session.

The benchmark rose as the pound dipped below $1.32 after the Bank of England's Monetary Policy Committee suggested it may consider further cutting its benchmark interest rate. Sterling fell to $1.3195 from $1.3236, where it traded before the Bank of England left its key rate unchanged at 0.25% (http://www.marketwatch.com/story/bank-of-england-holds-key-rate-at-025-as-expected-2016-09-15-791725).

Weakness in the pound in the wake of the U.K.'s vote in June to leave the European Union has benefited companies that rake in sales from overseas. Consumer products makers Reckitt Benckiser Group PLC (RB.LN) and Unilever PLC (ULVR.LN) each rose 0.6% and tobacco maker Imperial Brands PLC (IMBBY) rose 0.4%

The Bank of England will update its economic assessment in November. If "the outlook at that time is judged to be broadly consistent with the August Inflation Report projections, a majority of members expect to support a further cut in bank rate to its effective lower bound at one of the MPC's forthcoming meetings during the course of this year," the BOE said.

"The U.K. economy is still set to encounter a prolonged period of uncertainty following the EU referendum outcome. Therefore it does make sense that the BOE would leave its bias open towards further monetary easing if the economy does enter a period of turbulence," Jameel Ahmad, head of market research at FXTM, said in emailed comments.

Earlier Thursday, the Office for National Statistics said its retail sales reading rose 6.2% (http://www.marketwatch.com/story/uk-retail-sales-resilient-despite-brexit-2016-09-15) in August on a year-over-year basis. That outstripped a FactSet estimate of a 5.4% increase.

"Retail sales make up less than 20% of gross domestic product. However, they provide a timely insight to total consumption which makes up two-thirds of GDP. The continued strong performance of retail sales in August suits our above consensus call for the U.K.'s near- and medium-term growth prospects," said Kallum Pickering, economist at Berenberg, in a note.

Retail updates: Topping the blue-chip lndex was Wm. Morrison Supermarkets PLC (MRW.LN). Shares rallied 8% as the retail chain posted a 34% rise in first-half earnings and said it hasn't seen any changes in customer sentiment (http://www.marketwatch.com/story/morrisons-profit-up-says-no-hit-from-brexit-2016-09-15) following the Brexit vote in June.

Shares of supermarket rival Tesco PLC (TSCO.LN) climbed 3%, while J Sainsbury PLC (SBRY.LN) picked up 1.2%.

But Next PLC (NXT.LN) shares were 4.8% lower. The apparel and home furnishings retailer said full-price sales in its retail division were down (http://www.marketwatch.com/story/next-profit-down-15-as-full-price-sales-fall-2016-09-15)4% on a like-for-like basis.

Shares of department store Marks & Spencer PLC (MKS.LN) fell 2.5%.

Other movers: Publisher and exhibitions company Informa PLC (INF.LN) rose 2.7% on its plans to buy Penton Information Services for GBP1.18 billion pounds (http://www.marketwatch.com/story/informa-agrees-to-buy-penton-in-118-billion-deal-2016-09-15) ($1.57 billion).

Coca-Cola HBC AG shares rose 3.6% as the bottler was upgraded to buy from neutral at Credit Suisse.

(END) Dow Jones Newswires

September 15, 2016 09:59 ET (13:59 GMT)