London pre-open: Stocks seen up; UK economy stagnates in April

London stocks were set to rise at the open on Wednesday following heavy losses in the previous session, as investors mulled the latest UK GDP data.

The FTSE 100 was called to open around 30 points higher.

Figures released earlier by the Office for National Statistics showed the economy stagnated in April, having just come out of a recession a month earlier.

GDP was flat, in line with analysts’ expectations, following 0.4% growth in March.

Construction output declined by 1.4% in April following a 0.4% contraction in March and marking the third consecutive monthly fall. Meanwhile, production in the manufacturing sector fell 1.4%.

Paul Dales, chief UK economist at Capital Economics, said: "Overall, despite the stalling of the recovery in April, the dual drags on economic growth from higher interest rates and higher inflation will continue to fade throughout the year.

"That will generate a bit of an economic tailwind for the next government."

Looking ahead to the rest of the day, all eyes will be on the US CPI release at 1330 BST and the latest Federal Reserve interest rate decision at 1900 BST.

In corporate news, insurance, retirement and investment services group Legal & General announced a £200m share buyback as it set out plans to restructure the business into three core units and promised to increase shareholder returns.

“The strategy and targets set out today signal L&G’s ambition and commitment to invest to grow our business, and reward our shareholders for their support,” said chief executive António Simões.

The company said it intends to return more to shareholders over 2024 to 2027, with 5% dividend growth in 2024 followed by 2% growth per annum, in addition to further share repurchases.

Molten Ventures reported a gross portfolio value of £1.38bn for the year ended 31 March, with net assets rising to £1.25bn.

The FTSE 250 venture capital firm said key highlights of the 12 months ended 31 March included £65m invested from its balance sheet, the acquisition of Forward Partners, and a 50% forecasted revenue growth for its ‘Core’ portfolio.

It also launched its inaugural Sustainability Report, committed to climate initiatives, and formally established the Esprit Foundation, awarding its first grants to social mobility and inclusion projects.