* FTSE 100 down 0.2 pct, BoE keeps interest rates at 0.5 pct
* Oils lower, Royal Dutch Shell down on earnings concerns
* Retailers wane after Tesco misses Christmas forecasts
By David Brett
LONDON, Jan 13 (Reuters) - Energy stocks tugged Britain's
top share index lower on Thursday, led by Royal Dutch Shell
<RDSa.L> with traders citing talk of the oil major lowering its
earnings outlook.
London's blue chips took a breather after hitting a 31-month
closing high on Wednesday, as the Bank of England's (BoE)
monetary policy committee opted to keep interest rates at record
lows.
By 1216 GMT, the FTSE 100 <> was off 10.79 points, or
0.2 percent, at 6,039.93, after closing up 0.6 percent at
6,050.72 on Wednesday.
The BoE kept its key interest rate at a record low 0.5
percent, as expected, for the 22nd consecutive month on
Thursday.
"Rates have to go up sooner rather than later," said David
Jones, market strategist at IG Index.
"Forecasts for inflation suggest that it could get to 4
percent in the short-term. It's a difficult argument for any
central bank, particularly the UK, to keep rates down at these
level when inflation is where it is at."
The European Central Bank will make its interest rate
announcement at 1245 GMT, although no change is anticipated.
Royal Dutch Shell <RDSa.L> led a weaker energy sector
<.FTNMX0530>, down 1.0 percent with traders citing talk that the
oil major was guiding analysts lower on its earnings outlook.
There is "vague speculation in the market that Shell are
calling round talking down numbers," a trader in London said.
Miners <.FTNMX1770> were lower having gained almost 4
percent over the last two days.
Tesco <TSCO.L> was under pressure, down 2.3 percent after
missing Christmas sales forecasts. []
The world's third-biggest retailer set the tone for the
sector as electricals specialist Dixons <DXNS.L>, general
merchandise group Home Retail <HOME.L>, computer games seller
Game Group <GMG.L>, bicycles chain Halfords <HFD.L>, and fashion
group New Look all reported falling revenues.
TOBACCOS DRAG
UK-listed cigarette maker stocks British American Tobacco
<BATS.L> and Imperial Tobacco <IMT.L> fell 2.2 and 0.8 percent
respectively, as BofA Merrill Lynch downgraded both to "neutral"
from "buy".
On the upside, IMI <IMI.L> topped the FTSE 100 leaderboard,
gaining 4.6 percent, after the same broker upgraded its rating
on the stock to "buy" from "neutral".
UK banks <.FTNMX8350> were in positive territory as Spain
and Italy successfully sold a combined 9 billion euros ($11.83
billion) of debt, underpinned by hopes that policymakers may
soon shore up the region's fiscal defences.
On the macro economic front, British industrial output grew
at its slowest annual pace in four months in November, dragged
down by weakness in the oil and gas sector, despite strength in
manufacturing.
In the U.S., Wall Street pointed to a weaker start on
Thursday ahead of jobs figures due at 1330 GMT, and producer
prices and PPI inflation data later in the session, which will
be watched for the economic outlook and monetary policy
prospects in the world's largest economy.
($1=.7610 Euro)
(Editing by Sharon Lindores)
