London pre-open: Stocks seen higher ahead of GDP figures

London stocks were set for a firmer open on Thursday, taking their cue from a positive session in the US, where the Dow powered through the 20,000 mark for the first time and ahead of some key UK economic growth figures.

The FTSE 100 was expected to open 18 points higher than Wednesday’s close at 7,182.

The release of fourth-quarter gross domestic product data for the UK is at 0930 GMT, while the CBI distributive trades survey is at 1100 GMT.

CMC Markets’ Michael Hewson said: “Today’s first iteration of Q4 GDP is likely to show that the momentum that we saw in Q3 only saw a modest downtick. Despite an awful start to Q3 the UK economy still managed to post a creditable 0.6% expansion.

“This is unlikely to be repeated in Q4, nonetheless expectations are for an initial figure of 0.5% with services providing the lion’s share of activity. On an annualised basis this should come in just above 2%. Activity in the services sector is expected to account for 0.9%, down slightly from 1% in the previous quarter.

“While the GDP numbers are somewhat backward looking we’ll get an early look at how retailers have done in the post-Christmas period, with the latest CBI retail sales numbers for January. These are expected to show a modest decline from 35 in December to 27.”

In corporate news, Royal Bank of Scotland has confirmed it will take a further £3.1bn provisions to pay off a looming penalty in the US for its sale of residential mortgage-backed securities in the run up to the financial crisis.

RBS said on Thursday that it has set aside a total of £6.7bn, which would reduce its tangible net asset value per share at 30 September 2016 by 27p to 311p.

Whitbread, the owner of Costa Coffee and Premier Inn, reported that third quarter revenue rose and that it will meet full year expectations, as it remains on track with its three point plan to grow and innovate its UK businesses, to expand internationally, and to build a platform to support future growth.

In the quarter ended 1 December 2016, sales increased 8.6% and rose 1.7% on a like for like basis, compared with the same period the previous year.

Venture capital company 3i Group described a “robust performance” from its portfolio companies in the third quarter and continued investment momentum.

The FTSE 100 firm’s net asset value per share at period end was 558p, for a total return of 24.1% at 31 December.

Cash realisations reached £917m in the nine months from its private equity business, while year-to-date private equity cash investment were £356m.