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* FTSE 100 down 0.1 pct
* BoE seen keeping rates on hold
* Morrisons drops despite strong update
* RBS gains on special div prospect
By Danilo Masoni
MILAN, Sept 13 (Reuters) - The UK's top share index edged lower on Thursday ahead of a Bank of England meeting at which interest rates are set to be kept on hold, while retailers were mostly lower as investors reacted unfavourably to an update from supermarket group Morrisons MRW.L .
The FTSE 100 .FTSE was down 0.2 percent by 0859 GMT, as a pull-back in oil and tobacco stocks, which had pushed up the index in the previous session, more than offset gains in banks and materials.
Economists polled by Reuters all expect the BoE, which raised rates last month, to vote 9-0 to leave them at 0.75 percent. Most do not predict a further rate rise until after Britain leaves the European Union in March 2019. August's hike it is likely to be a completely forgettable get-together, with it being hard to see the newly re-signed Mark Carney and his colleagues doing anything to shake the markets," Connor Campbell, analyst at Spreadex, said.
Sterling, holding steady near one-month highs, also weighed on shares in big international exporters, which are heavily represented on the index. & Spencer MKS.L was the leading loser on the FTSE, down 2.6 percent, while Morrisons fell 1 percent despite its first-half profit growth beating forecasts and a quarterly sales performance that was its best in nine years. analysts were concerned about pressure from low-cost competitors, arguing the strong update was a one-off.
"The question now is where can Morrisons go from here? There remains some intense pressure from discounters, whilst Tesco (LON:TSCO) has lately announced its own discount chain aimed at countering the German upstarts. Further pressure on margins seems inevitable," said Neil Wilson, analyst at Markets.com.
Other retailers were also under pressure on a negative read-across from poor results from the country's biggest department store group John Lewis, whose profit was wiped out in the first half as it was forced to match discounting by its struggling rivals on a fiercely competitive high street. OCDO.L , which rose 2 percent, was an exception.
Small cap Debenhams DEB.L fell 6.9 percent after Sports Direct SPD.L ruled out a bid for the department store operator. provided some support to the FTSE, with shares in Royal Bank of Scotland RBS.L up 1.5 percent as its chairman was reported as saying the lender could pay a special dividend. HSBC HSBA.L and Barclays BARC.L also rose.
Miners were also in demand as copper prices rallied after a U.S. official said Washington had invited Beijing to restart talks aimed at resolving their trade dispute.