LONDON (AP) -- Stocks traded lower Thursday after Wall Street's recent rally ran out of steam and the Bank of England kept interest rates on hold. The euro, meanwhile, was shaken by renewed jitters in Europe's debt markets, where Portugal's borrowing costs spiked to a new euro-era high.
The main scheduled event of the day was the Bank of England's interest rate decision.
Though its decision to keep its benchmark rate unchanged at 0.5 percent was largely expected, there had been some speculation in the markets in the run-up to the decision that the Bank might raise rates. That speculation has supported the pound in recent weeks, particularly against the dollar. Higher rates attract investors to a currency because of better returns on interest-bearing investments.
Despite recent figures showing that the British economy shrank by 0.5 percent in the final three months of 2010, there are worries within the rate-setting Monetary Policy Committee that inflation is getting too high due to sharp rises in energy and commodity costs -- in December, the annual rate of inflation spiked to 3.7 percent, way ahead of the Bank's target of 2 percent.
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