London pre-open: Stocks seen muted ahead of BoE

London stocks were set for a muted open on Thursday as investors eyed the latest policy announcement from the Bank of England.

The FTSE 100 was called to open four points higher at 7,745.

CMC Markets analyst Michael Hewson said: "With wages slowly starting to play catchup with headline CPI in various parts of the country, its highly likely we will see another 25bps rate hike today, albeit on a split vote, with headline CPI still above 10% and core prices at 6.2%, with the potential that we might see a further 25bps during the summer, although for now that remains an outlier, with the very real prospect that we could be at the end of the rate hiking cycle or at least very close to it.

"The Bank of England will also update us with their latest updated projections for inflation, as well as their view on the outlook for the UK economy, with GDP expected to be revised up, although as with most of their predictions they will probably end up being wrong.

"Nonetheless we should get a decent idea of their thinking when it comes to their expectations for further rate increases, which are likely to lean towards the dovish side. Bank of England governor Andrew Bailey does have form for talking the economy and sterling down after hiking rates. It’s unlikely today will be any different."

In corporate news, oil and gas engineer Wood Group, currently in talks on a potential $1.6bn takeover by private equity group Apollo, held annual guidance as first-quarter revenues increased.

The company said revenue rose to around $1.45bn, reflecting good momentum across all business units. Group adjusted core earnings was in line with expectations.

Its order book at March 31 was around $5.7bn, slightly lower than at December 2022 and reflecting the phasing of large multi-year awards in operations, Wood said.

"The order book for delivery in 2023 has continued to build and is up significantly on the position a year ago," it added. "While we remain mindful of the uncertain economic outlook, our expectations for 2023 remain unchanged."

Broadcaster ITV reported a drop in first-quarter total advertising revenue (TAR) and said the outlook was "challenging" given the current macroeconomic backdrop.

In the three months to the end of March, TAR fell 10%. However, this was "as expected and better than the wider TV advertising market", it said.

ITV said TAR is forecast to decline 12% in the second quarter, with April down 12% and May expected to see a 10% fall.