London open: Stocks nudge up as investors eye jobs data

London stocks nudged higher in early trade ahead of some key UK jobs data and an expected interest rate hike from the Federal Reserve.

At 0830 BST, the FTSE 100 was up 0.1% to 7,505.79, while the pound was 0.2% higher versus the euro and the dollar at 1.1398 and 1.2785, respectively, as investors awaited the ILO unemployment rate, claimant count and average earnings at 0930 BST.

Spreadex analyst Connor Campbell said: "Considering that the consumer price index is now at an eye-watering 2.9% there is going to be even more focus on the latest wage growth reading this Wednesday (bear in mind that the former was for May, and the latter is for April). Analysts are expecting the average earnings to remain unchanged at 2.4%, marking a half a percent drop in real wages. That is going to continue to put pressure on household spending, which last month fell for the first time in almost 4 years - it’s no coincidence that the decline correlates with the Brexit-inspired 4 year high inflation readings of April and May.

"Beyond the wage data, the unemployment rate is forecast to hold at 4.6% - though its beaten estimates in 2 of the last 3 months - while the claimant count change number is set to drop from 19.4k to 12.5 month-on-month."

Meanwhile, the FOMC rate decision is at 1900 BST, with a 25 basis points rate hike largely priced in, meaning the focus will be on the outlook and any clues about further rate hikes.

On the political front, Prime Minister Theresa May was expected to announce a pact with Northern Ireland's Democratic Unionist Party later on Wednesday amid reports that former PM David Cameron said there would be pressure on May to opt for a softer exit from the EU.

May confirmed on Tuesday that Brexit negotiations will begin as scheduled next week.

In corporate news, WH Smith shares edged higher as it said sales growth remained almost unchanged in the third quarter, with the retailer's profits margins said to be improving.

Housebuilder Bellway rallied after saying housing completions for the year to the end of July are expected to have grown 10% from last year's 8,721, marking another year of significant volume growth and ahead of its original target.

CLS Holdings ticked up as it announced the acquisition of a portfolio of 12 office buildings for €148m, while Aggreko powered ahead after saying it has acquired Indonesia-based power rental company KBT (Kerta Bumni Teknindo), for up to $32.8m.

British American Tobacco was just a touch weaker despite saying earnings for the half year have been lifted by exchange rates and that it expects to outperform the industry with its interim results later this month.