* FTSE 100 rises 0.4 pct
* Unilever surges on new CEO
* Banks fall ahead of BoE decision
By Dominic Lau
LONDON, Sept 4 (Reuters) - The UK's top share index drifted
higher in late morning trade on Thursday ahead of the Bank of
England's interest rate verdict, as gains in commodity stocks
and food producer Unilever <ULVR.L> offset weakness in banks.
By 1022 GMT, the FTSE 100 <> was up 22 points, or 0.4
percent at 5,521.7, reversing some of the previous session's 1.2
percent fall.
Energy stocks were in demand after recent battering and
after crude prices <CLc1> rose by a dollar to above $110 a
barrel.
BP <BP.L> advanced 3.5 percent, also aided by a deal with
the Russian oligarch co-owners of TNK-BP venture, ending months
of increasingly hostile dispute. []
Royal Dutch Shell <RDSa.L>, Tullow Oil <TLW.L> and Cairn
Energy <CNE.L> put on between 0.1 to 2.7 percent.
BG Group <BG.L> strengthened 4.8 percent with traders citing
market talk of bid interest from Exxon Mobil <XOM.N>. BG
declined to comment.
Miners also gained, tracking higher metal prices. BHP
Billiton <BLT.L>, Rio Tinto <RIO.L>, Anglo American <AAL.L>,
Xstrata <XTA.L> and Ferrexpo <FXPO.L> rose between 0.9 and 3.2
percent.
Unilever, however, topped the FTSE 100 gainers, rising 6.3
percent as investors cheered the food producer's announcement of
appointing Paul Polman, a consumer goods veteran, as its new
chief executive. []
All eyes are on the Bank of England's interest rate decision
due at 1100 GMT. Analysts expects the central bank to leave
rates unchanged at 5 percent but expectations are rising that a
stuttering economy will force it to cut rates before the end of
the year.
"It's too early (for a rate cut) with inflation where it is.
The sentiment is to keep rates unchanged," said Mark Foulds,
head of equity sales at TradIndex.
"As for the market, it is dead on the back of waiting for
that decision. I don't see activity picking up this afternoon.
It has got a very quiet feel to it."
Britain's economy failed to grow in the second quarter of
this year for the first time since the early 1990s and many
analysts believe the country has already tipped into recession.
A survey showed on Thursday British house prices fell for
the seventh month running in August to stand a record 12.7
percent lower than a year earlier.
BANKS WEIGH
Banks were the top-weighted losers, with HSBC <HSBA.L>,
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, Lloyds TSB
<LLOY.L> and HBOS <HBOS.L> slipping in a range from 0.7 to 2.1
percent.
Sterling, meanwhile, hit a record low versus euro.
British Airways <BAY.L> dropped 3.2 percent to top the FTSE
100 losers, with a struggling pound and a rise in the price of
crude denting sentiment. Cruise operator Carnival <CCL.L> also
fell 2.2 percent.
Shares in Marks & Spencer <MKS.L> shed 2 percent on
newspaper reports that the GMB union plans to launch a series of
protests against the retailer after it sacked a member of staff
for gross misconduct on Wednesday.
Also featured on the downside, Smiths Group <SMIN.L> lost
2.2 percent after JPMorgan cut its rating for the engineer to
"underperform" from "neutral".
Invensys <ISYS.L> added 1.4 percent after JPMorgan upgraded
its rating to "neutral" from "underweight" in the same review of
the European capital goods sector.
(Additional reporting by Jon Hopkins; Editing by Jon
Loades-Carter)
