London open: Stocks up as sterling weakens ahead of BoE

At 0855 BST, the FTSE 100 was up 0.5% at 7,780.05, while the pound was down 0.4% against the dollar at 1.2576.

A weaker pound tends to boost the top-flight index as around 70% of its constituents derive their earnings from overseas.

Neil Wilson, chief market analyst at Markets.com, said: "The Bank of England will raise rates by 25bps today - inflation remains above 10%, so the situation is way more acute than in the US. Moreover the economic data is holding up much better than forecasts last autumn indicated. I’d expect the Bank to signal more tightening is likely going to be warranted.”

He noted that the Bank said in its March policy statement that if there were to be evidence of more persistent pressures, then further tightening of monetary policy would be required.

"The data since then hardly indicates easing in inflation pressure. Airy fairy guidance to remain," Wilson said. "The problem the BoE faces is two-fold, neither of which it can do anything about: one is it was too slow in its pace of tightening - there was never a ‘whatever it takes’ philosophy, so it never jumped in front of the inflation steamroller. Two is the mortgage market and a tonne of fixed rate deals rolling off over this year.

"The good news it’s less demand-driven so it will hope it can sit and wait it out. It will hope that the lag of hikes and base effects from energy will do the job now and this 12th hike could be its last. The market probably will think otherwise - but the market keeps ignoring the Fed, too. Remember the BoE is basing whether to hike on forecasts for inflation in two years’ time, not what is coming down the pipe in the coming months. Base scenario is a 25bps, split MPC with maybe 1-2 saying no hike, and growth forecasts revised up."

The BoE rate announcement is due at midday.

In equity markets, Diploma was boosted by an upgrade to ‘buy’ from ‘hold’ at Jefferies.

Airtel Africa slumped after full-year results, while engine maker Rolls-Royce lost ground as it held annual guidance and said large engine flying hours had hit 83% of 2019 levels in the four months to April 30.

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

Vodafone was a little lower after announcing a a strategic relationship with shareholder Emirates Telecommunications, also known as e&, which will see the company’s chief executive take a seat on the board.

Petershill Partners, Tesco, HSBC and BP all fell as they traded without entitlement to the dividend.