London open: Flat start ahead of ECB decision

London stocks were flat on Thursday as investors looked ahead to data on UK retail sales and the European Central Bank’s latest policy decision.

UK retail sales figures at 0930 BST are expected to show a 3.8% year-on-year rise in March, compared to 4.1% growth the previous month.

The ECB’s policy decision, however, will be the main event at 1245 BST. The Governing Council is widely expected to keep key rates and its asset purchase programme unchanged a month after announcing a raft of new measures to address prolonged low inflation and a stagnant economic recovery.

In March, the ECB surprised the market as it slashed its main interest rate by five basis points (bps) to 0.00% and increased quantitative easing (QE) by €20bn to €80bn per month. The ECB also cut the deposit facility rate by 10bps to -0.40% and the marginal lending facility rate to 0.25% from 0.30%.

“Despite the comprehensive package of easing, which was announced in March, the ECB is still under pressure to ease again as inflation expectations remain around a historically low level, while the effective euro has strengthened following the easing from the ECB,” said Danske Bank.

Governor Mario Draghi’s press conference at 1330 BST will be monitored closely on Thursday for any clues on the ECB’s next move.

Meanwhile, oil prices gained as US government data showed weekly crude inventories rose less than expected. Crude inventories increased by 2.1m barrels to 538.6m last week, compared to analysts’ forecasts for a 2.4m gain, according to the Department of Energy.

Brent crude rose 0.17% to $45.88 per barrel and West Texas Intermediate gained 0.24% to $44.29 per barrel.

In company news, Sky fell after the broadcaster reported a slowdown in the number of new TV customers in the three months to the end of March.

Acacia Mining gained after reporting a 24% jump in earnings before interest tax, depreciation and amortisation to $66m in the first quarter, driven by an increase in revenue and lower cash costs.

Ladbrokes edged higher as the gaming group posted a 10.6% increase in revenue in the three months ended 31 March, with UK Retail net revenue up 4.1% and digital revenue up 36.5%.