London pre-open: Stocks seen down ahead of services PMIs

The FTSE 100 was called to open 22 points lower at 7,430.

CMC Markets analyst Michael Hewson said: "On the PMI front the UK services sector is expected to confirm a fall to 48.7 from 51.5 in June, in a sign that higher prices are finally starting to constrain consumer spending."

The S&P Global/CIPS UK services PMI is due at 0930 BST, while the eurozone HCOB services PMI is out at 0900 BST.

Investors will also be digesting the latest data out of China, where the Caixin services purchasing managers’ index for August fell to 51.8 from 54.1 in July, coming in below consensus expectations of 53.0.

On home shores, meanwhile, the latest figures from the British Retail Consortium showed that sales growth jumped in August, as an improvement in consumer confidence drove spending on health and beauty products, and food and drink.

Total retail sales increased at an annual rate of 4.1% last month, accelerating from the 1.5% growth registered in July after disappointing weather dampened footfall for many retailers.

The three-month moving average for annual sales growth increased to 3.6% in August from 3.5% in July, BRC said.

The three-month average growth rate of food sales eased from 8.4% to 8.2%, but this was offset by an improvement in the decline in non-food, from -0.5% to -0.2%.

BRC chief executive Helen Dickinson said: "Sale of non-food products had their best month since February, particularly for health and beauty products as retailers continued to invest in new, exciting brands, and customers splurged on self-care."

Dickinson said that while easing inflation will come as a welcome relief for many, sales growth may fall in the coming months, even if volume growth does not.

"Furthermore, high interest rates and high winter energy bills will put pressure on many households to spend cautiously. Retailers are combatting this through a clear focus on great value for consumers, expanding budget ranges, and finding ways to cut costs where possible," she said.

In corporate news, equipment rental group Ashtead posted a record performance in its fiscal first quarter, with double-digit growth across the board, as it delivered a bullish outlook for the rest of the year.

Revenues at constant currency rose 19% year-on-year in the three months to 31 July to $2.7bn, while adjusted pre-tax profit increased 11% to $615m. Chief executive Brendan Horgan said strength in the US market is expected to outweigh a "softening" in UK market conditions.

"We expect overall performance to be in line with our expectations and the Board looks to the future with confidence," Horgan said.

TI Fluid Systems said it had agreed to buy Hungarian firm Cascade Engineering Europe for €25.4m (£21.7m) in cash.

Cascade makes thermal fluid connectors and other plastic injection moulded components for the automotive industry. TI Fluid said the business had a "strong reputation for its technical expertise and product quality, with in-house capabilities from design and development to tooling, prototyping and serial manufacturing".

"CEE is expected to generate revenue of €35m in the year to December 31 and the acquisition will be immediately accretive to the group's underlying earnings," it added.