London pre-open: Stocks seen up as investors eye inflation data

London stocks were set for a firmer open on Monday following heavy losses at the end of last week, as investors looked ahead to inflation readings this week in the UK and US.

The FTSE 100 was called to open around 20 points higher at 7,381.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "The all-important inflation data due Tuesday is going to impact the inflow/outflow dynamics in US Treasuries before the worries grow into the Friday funding deadline.

"A sufficiently soft inflation read should keep bond traders in appetite for further purchases and mask a part of the political worries, while disappointment could keep buyers on the sidelines and amplify a potential political-led selloff.

"The good news is that the US headline inflation is expected to have eased to 3.3% in October, from 3.7% printed a month earlier. Core inflation is seen steady around the 4.1% level. The bad news is, the expectation is soft and could be hard to beat."

On home shores, data released earlier by Rightmove showed that house prices fell sharply in November as sellers trimmed expectations to secure sales.

According to the latest house price index, the average new selling asking price dropped 1.7% in November to £362,143. It was the steepest November drop since 2018.

Annually, prices fell 1.3%.

That compares to a 0.5% monthly uptick in October, and 0.8% fall year-on-year.

Rightmove said that with Christmas now approaching, sellers were cutting prices as they look to attracted cash-strapped buyers.

Agreed sales were 10% below 2019’s pre-pandemic market, although that is an improvement on October, when agreed sales were 15% below 2019.

Tim Bannister, director of property science at Rightmove, said: "We’d expect to see a drop in new seller asking prices in the last couple of the months of the year, as serious sellers start to cut through the Christmas noise with an attractive price to secure a buyer.

"However, the larger-than-usual drop this month signals that among the usual pricing seasonality, we are starting to see more new sellers come to market with more enticing prices.

"Buyers are still out there, but for many their affordability is much reduced due to higher mortgage rates."

In corporate news, security and aerospace giant BAE Systems said it is trading in line with expectations after a strong third quarter, with £10bn in orders booked since the half-year stage.

"We are delivering another year of good sales and earnings growth, together with strong cash flow generation," said chief executive Charles Woodburn.

The company said it is seeing continuing customer confidence in its ability to "deliver important capabilities at a time of heightening geopolitical risk".

Elsewhere, Kainos posted a jump in first-half profit and revenue as it hailed continued strong growth across its key business areas.

In the six months to 30 September, pre-tax profit rose 12% to £30.9m, on revenue of £193.2m, up 7% on the same period a year earlier.