London pre-open: Stocks seen lower as investors mull UK GDP

London stocks were set to fall at the open on Friday following downbeat closes in the US and Asia, as investors digest the latest UK GDP data.

The FTSE 100 was called to open 30 points lower at 7,291.

Figures out earlier from the Office for National Statistics showed the economy grew just 0.1% in October, coming in weaker than expectations for 0.4% growth. This left the economy 0.5% below February 2020 pre-pandemic levels.

Investors will also be eyeing the release of the latest US inflation figures at 1330 GMT.

CMC Markets analyst Michael Hewson said: "As we look ahead to this afternoon's US numbers, European markets are set to open slightly lower, as Asia markets also underwent a similarly cautious session.

"We’ve certainly come a long way since the Omicron inspired meltdown post-Thanksgiving, and while we’ve managed to claw back most of those losses for the most part, there is a concern over the economic cost of further restrictions at a time when central banks are likely to have to be less forthcoming when it comes to monetary policy. This will be a tricky path to navigate especially if CPI surges by more than expected later today.

"With the Federal Reserve due to meet next week, there is some concern that a really hot number today could prompt the FOMC to go accelerate its tapering program more rapidly, from the current $10bn of US treasuries and $5bn of mortgage-backed securities that it started last month, in an attempt to give themselves more optionality in 2022 when it comes to raising rates. Currently markets are pricing the prospect of a doubling of the taper next week, and any number that hints at a bigger amount next week could prompt some choppiness."

In corporate news, Associated British Foods said Primark trading for the year to date has been ahead of expectations with improved like-for-like sales compared to the fourth quarter of its last financial year, but warned of increasing Covid cases hitting stores in Europe.

The company added that it expected annual sales to be “significantly better” than the prior year when the Covid pandemic shut its stores for five months.

Food packaging business Hilton Food Group said that it has agreed to acquire smoked salmon producer Dutch Seafood Company as part of an effort to expand its presence in a growing protein category and enter the US, a new geography for the firm.

In order to fund the bulk of the €90.0m acquisition, Hilton Food launched an equity placing aimed at raising approximately £75.0m, while the balance will be funded through a committed acquisition bridge facility.