London pre-open: Stocks set for muted start ahead of BoE rate announcement

London stocks looked set for a muted open on Thursday as investors eyed the latest rate announcement and Inflation Report from the Bank of England.

The FTSE 100 was set to open eight points higher than Wednesday’s close at 6,642.

CMC Markets’ Michael Hewson said: “While it is widely expected today that the Bank of England will lower its growth forecasts it is also expected to make a move on interest rates for the first time since 2009, and cut rates by at least 25 basis points to a new record low of 0.25%. It could also go on to announce the intention to implement further asset buying programs, however there is a school of thought that suggests the Bank should hold firm and wait and see.

“This is because there is a widespread acknowledgement that any such action today will probably not make a blind bit of difference and could well make things much worse, not only for banks, who are already struggling with wafer thin margins, but also for pension funds who are struggling with spiralling deficits, while savers continue to struggle with meagre returns.”

Later on in the day, market participants will turn their attention to the US, where initial jobless claims are at 1330 BST and durable goods orders and industrial new orders at 1500 BST.

In corporate news, insurance giant Aviva posted its interim results for the six months to 30 June on Thursday, with operating profit rising 13% to £1.325bn and operating earnings per share improving 1% to 22.4p.

The FTSE 100 firm’s IFRS profit after tax was £201m, down from £545m in the first half of last year.

During the period, general insurance net written premiums were up 7% to £3.991bn, the life insurance value of new business increased 7% to £583m, its fund management operating profit grew 48% to £49m, and its UK Life assets under management were up 23% to £10.3bn.

Inmarsat posted a respectable set of interim results on Thursday after the satellite services group returned to growth in the second quarter thanks to growth from the aviation sector, government contracts and its deal to supply mobile network Ligado Networks.

Full-year guidance was maintained, as revenues in the six months to 30 June rose 2.1% on the previous period to $629.0m, earnings before interest, tax, depreciation and amortisation (EBITDA) 7.5% at $368.4m.

Traffic at low-cost carrier EasyJet was up 6.7% in July to 7.5m passengers, while the load factor – which gauges how full the flights were – nudged up to 95.8% from 94.3%.

On a rolling 12-month basis, traffic was up 6.8% to 72.3m and the load factor ticked just a touch higher to 91.7% from 91.4%.