London pre-open: Stocks seen lower ahead of BoE rate announcement

Stocks in London were expected to open a little lower as investors awaited the latest monetary policy decision from the Bank of England.

The FTSE 100 was set to open 17 points lower than Wednesday’s close at 6,656.

On the data front, UK retail sales are at 0930 BST, while the BoE rate announcement is at 1200 BST.

Last month, the BoE cut rates for the first time since 2009 and embarked on an additional £70bn of asset purchases, despite evidence in a lot of quarters that the slide in sentiment in the wake of the June Brexit vote proved to be a temporary phenomenon, said CMC Markets' Michael Hewson.

“Since then there has been further evidence that the Bank of England could well have been a little hasty, not that you will hear policymakers admit the fact. They had already backed themselves into a corner of their own making in the lead up to August and to do nothing would probably not have gone down that well.

“Nonetheless the apocalyptic vision that was painted by senior policymakers in the lead up and aftermath of June’s events, hasn’t as yet come to pass, and in all likelihood won’t either. It is slowly becoming apparent that while the Brexit vote has created some uncertainty with respect to the UK’s future trading relationships it is becoming apparent that what happens next will be part of a process with pros and cons on both sides.”

In the US, initial jobless claims and the Philadelphia Fed survey at 1330 BST are among the highlights.

In corporate news, high street fashion stalwart Next showed sales growth across the business in its half-year results on Thursday, but earnings were still facing an uphill battle in its retail division.

The FTSE 100 retailer posted sales growth of 0.1% in retail for the six months to July to £1.084bn, with directory sales rising 7.1% to £821.2m and total group sales increasing 2.6% to £1.96bn.

Divisional profit at Next retail slipped by 16.8% for the period, however, to £133.9m, though directory managed a 10.9% increase to £204.2m, with group operating profit down 0.4% to £360.5m.

Supermarket chain Wm. Morrison released its interim numbers for the half year to 31 July on Thursday, with first half like-for-like sales excluding fuel and VAT up 1.4%.

The FTSE 100 firm said total turnover was almost flat, reducing 0.4% to £8.03bn, though underlying profit before tax rose 11% to £157m, or up 34% including the prior year’s restructuring costs.

Underlying earnings per share were up 35% to 5.04p.

Informa, a business intelligence, events and academic publishing company, plans to buy Penton Information Services for £1.2bn.

The proposed acquisition, part of the company's growth acceleration plan, will be funded by a fully-underwritten £715m rights issue, which will strengthen its global exhibitions and business intelligence divisions and its presence in the US.