London pre-open: FTSE seen lower as Fed signals one rate cut this year
London stocks were set to fall at the open on Thursday as investors mulled the latest policy announcement from the US Federal Reserve.
The FTSE 100 was called to open around 25 points lower.
The Fed held interest rates on Wednesday at between 5.25% and 5.5% and signalled there would be just one rate cut this year.
Oxford Economics said: "The Federal Open Market Committee marked down its forecast for the number of rate cuts this year to just one from three in March.
"The FOMC's updated projections won't change our forecast for two rate cuts this year, however, with the first to come in September. We expect a string of more favourable inflation releases - on the heels of Wednesday's softer-than-expected May CPI report - will clear the way for the Fed to lower rates in September."
In corporate news, Virgin Money posted an 18% jump in interim profit as it continued to benefit from higher interest rates and a lower bad debt charge, but said it expected headwinds in the second half of the year with the Bank of England expected to cut its benchmark base rate.
Pre-tax profit for the six months to March 31 came in at £279m from £236m a year earlier. Net interest income rose 2% to £868m, while net interest margin - the difference between the bank’s lending and savings rates - was up three basis points to 1.94%. Bad debt charges were down to £93m from £144m.
Financial advisory firm St James’s Place said it has appointed the chief financial officer of Credit Suisse’s UK operations as its new CFO, replacing Craig Gentle who will be retiring from the business after six years leading the finance function.
Subject to the necessary regulatory approvals, Caroline Waddington will join the board in the second half of the year, at which point Gentle will step down as a director.
A chartered accountant, Waddington was the former chief operating officer at Credit Suisse International and has held senior finance roles at Barclays Capital, RBS and Deutsche Bank.