London pre-open: Stocks to slip on US rate-hike fears

UK stocks were set to decline for the fifth straight session on Thursday after the minutes of a recent Federal Reserve meeting showed caution about taking the brakes off interest-rate hikes too soon.

Futures on the FTSE 100 were pointing to a 0.4% early on from Wednesday’s close of 7,356.88 – already a five-week low.

The minutes from July’s Federal Open Market Committee meeting were at the top of the agenda after the closing bell in London, after recent strong economic data raised concerns that the Fed may once again step in to raise rates to stop an overheating economy.

The publication showed a divided opinion within the FOMC, with a majority hinting at the need for “further tightening of monetary policy” to tackle rising inflation, which they viewed as having “significant upside risks”.

The minutes noted that some officials held concerns about potential economic downturns, despite the present resilience of the economy, pointing towards the possibility of a short-term slowdown in real GDP growth, and a slight weakening in the labour market.

Eyes will now turn to the release of US weekly jobless claims data for the week to 12 August, which is expected to show 240,000 filings for unemployment benefits, down from 248,000 the week before.

Back in London, no blue-chip firms reporting earnings or trading updates on Thursday morning. However, a bunch of heavyweight stocks will be trading ex-dividend, so will likely provide some downward pressure on markets, such as Anglo American, Lloyds and Schroders.

One announcement was that BAE Systems is buying Ball Corporation's aerospace business for $5.55bn in cash. Ball Aerospace makes spacecraft, mission payloads, optical systems, and antenna systems, serving the intelligence community, US Department of Defense, and civilian space agencies, BAE said in a statement.