London pre-open: Stocks to edge down ahead of BoE announcement

London stocks were set to edge lower at the open on Thursday as investors eyed the latest policy announcement from the Bank of England.

The FTSE 100 was called to open seven points lower at 7,116.

CMC Markets analyst Michael Hewson said: "While there is little likelihood of a change in policy at the meeting this week, it will still be noteworthy if there is dissent on the pace of the bond buying programme, and whether the bank will look at slowing the pace.

"Anything more or less than a 7-1 or 6-2 split on the asset purchase program would therefore be a surprise, with 8-0 on keeping rates unchanged. The MPC’s main challenge will be anchoring expectations and keeping their options open on when to expect a rate rise."

In corporate news, engine maker Rolls-Royce swung to an interim profit as it continued to cut costs and looked to turn cash-flow positive during the second half of the year.

The company reported pre-tax profits of £114m compared with a £5.2bn loss last year when the Covid-19 pandemic virtually grounded air passenger travel. Underlying operating profit came in at £307m from a £1.6bn loss in 2020.

WPP upgraded its outlook and boosted shareholder returns as the advertising company swung back to profit in the first half of 2021.

The group reported a £394m pre-tax profit for the six months to the end of June compared with a £3.2bn loss a year earlier as reported revenue less pass-through costs rose 5% to £4.9bn.

WPP increased its interim dividend by 25% to 12.5p a share and said it would buy back £350m shares in the second half. The company said it expected like-for-like revenue less pass-through costs to rise by 9-10% in 2021.

Mondi reported higher sales volumes and higher average selling prices in its first half, with underlying EBITDA coming in at €709m (£604.38m), down from €738m year-on-year, with a margin of 19.5%.

The paper and packaging company said cash generated from operations was €552m in the six months ended 30 June, down from €602m, while its balance sheet stood at 1.5x net debt-to-underlying EBITDA. It declared an interim dividend of 20.0 euro cents per share.