London pre-open: Stocks seen lower ahead of BoE

Stocks in London were set to open lower on Thursday as investors eye the Bank of England rate announcement and digest the latest policy decision by the Federal Reserve.

The FTSE 100 was called to open down 10 points from Wednesday’s close at 6,835.

On Wednesday the Federal Reserve decided not to up its key interest rate, as widely expected, but indicated that a hike could be on the cards at its next meeting in December.

CMC Markets’ Michael Hewson said: “The Fed made no mention of the political tsunami affecting global markets merely stating that the US economy is making good progress, and unlike last year they held back from directly implying that a rate hike was imminent, though theremoval of the line about inflation remaining low in the near term would appear to suggest that policymakers expect prices to start rising again, thus keeping the prospect of a December move very much on the table.”

As far as the BoE is concerned, he said: “It is quite clear that any further easing at this time is not necessary and it is quite likely that the Bank of England will have to revise upwards its inflation and growth forecasts. The inflation forecast will be of particular interest given the recent rise in forward inflation expectations which are currently well above the levels of 10 year gilt yields.”

Also on Thursday, the High Court will declare its verdict on whether the UK government has the right to trigger Brexit.

UK services PMI is at 0930 GMT, while the BoE rate announcement and the Inflation Report are due at 1200 GMT. In the US, initial jobless claims are at 1230 GMT and ISM non-manufacturing is at 1400 GMT.

In corporate news, Wm Morrison Supermarkets reported its fourth consecutive quarter of growth, helped by its biggest ever Halloween.

Like-for-like sales in the three months to 30 October increased 1.6%, or 3.4% including fuel, with total sales down 1.2% due to the sale of its convenience stores last winter.

Asset manager Schroders reported that its pre-tax profit and assets under management had increased as it made progress in North America.

For the nine months ended 30 September, pre-tax profit fell by 0.6% to £436.2m, compared to last year, but its assets under management climbed 27% to £375bn.

Specialty chemical company Croda International updated the market on Thursday on its trading during the third quarter to 30 September, with constant currency sales up 2.5% during the three months and 2.4% year-to-date.

The FTSE 100 firm said its innovation strategy was continuing to have an impact, with ‘New and Protected Products’ accounting for 27.6% of year to date sales, up from 26.4% a year earlier.