London pre-open: Stocks seen lower as investors eye Budget

London stocks were set to edge down at the open on Monday as investors turned their attention to this week’s Budget.

The FTSE 100 was called to open around 15 points lower.

On Wednesday, Chancellor Jeremy Hunt will present the Spring Budget to Parliament at 1230 GMT in what is likely to be the last major economic update before the upcoming general election.

Kathleen Brooks, research director at XTB, said: "The showpiece is expected to be a 2p cut to the national insurance rate, however, the chancellor gives with one hand, but he is likely to take away with another.

"Reports on Monday suggest that he has pencilled in plans to recoup £9bn through tax rises and spending cuts, in order to pay for the cut in NI. The fiscal headroom available to the Chancellor is expected to be £20bn, which is lower than the average of nearly £30bn available since 2010, and highlights the fiscal tight spot the UK finds itself in.

"After the NI cut, the chancellor may only have £10-15bn left to give away election sweeteners to try and boost votes for the Tories. This is the ultimate election budget, with a bit of fiscal prudence thrown in. However, because the Tories are on track to lose this election, there is also a sense that this Budget may not be worth the paper that it is written on, as any tax and spending changes could be reversed by the next government.

"There are two other factors to consider alongside this Budget. The Chancellor is not going to want to do anything that could make an interest rate cut from the BOE less likely, as this could be more important for winning votes than future tax giveaways. This means that we don’t expect any major changes on Wednesday. Also, the OBR forecasts will be worth watching. Will they revise down growth forecasts to bring them more in line with the BOE? Could inflation be revised up? Either way, the OBR forecasts may paint the UK economy in an unflattering light."

Brooks said she does not expect the Budget to move the dial for UK equities, which are struggling from their lack of exposure to tech and AI.

In corporate news, Aviva made its first foray into the Lloyd’s insurance market with the £242m purchase of underwriting syndicate Probitas.

The deal includes the acquisition of Probitas's Lloyd's platform, taking in its corporate member, managing agent, international distribution entities and tenancy rights to Syndicate 1492, Aviva said.

Intertek announced its acquisition of Base Metallurgical Laboratories, a provider of metallurgical testing services in North America, for an undisclosed sum.

The FTSE 100 firm said the acquisition would strengthen its position in the industry by expanding its geographic footprint and complementing its existing capabilities in geochemistry, mine site laboratories, and trade inspection.

With a focus on critical metals like gold and copper, it said Base Met Labs aligned with the increasing demand for minerals testing, particularly in battery and energy metals.

European regulators have validated two marketing authorisation applications for AstraZeneca, as the biopharma giant's datopotamab deruxtecan product comes one step closer to receiving the green light to treat two types of cancer.

The validations confirm the completion of the applications and will kickstart the scientific review process by the European Medicines Agency's Committee for Medicinal Products for Human Use.