London pre-open: Stocks set to dip after Trump slaps tariffs on Mexico 'out of the blue'

In the background, previously announced retaliatory trade tariffs from China were set to kick-in at midnight and, according to Bloomberg, China had in fact already prepared measures to curb the supply of rare earths should the trade war with Washington escalate further.

Meanwhile, a weaker-than-expected reading on UK house prices was doing little to bolster the mood.

The top-flight index was being called to start the session down by roughly 30 points at 7.188.

Commenting on Trump's decision to impose a 5% tariff on all goods from Mexico in response to a "surge" in immigration, analysts criticised both the fact that it was a proverbial 'bolt out of the blue' and the fact that it came right after the two countries had reached an agreement on a new trade pact.

Mexico was America's second largest trading partner and the White House said the tariffs were set to rise gradually until October, when they would reach 25% in the absence of an improvement in immigrant flows on their common border.

For his part, Michael Hewson at CMC Markets UK said: "It also makes it much more difficult for countries to take the US at its word when it comes to trade negotiations if its President can so easily lob a hand grenade into the path of an already agreed deal."

In parallel, overnight the closely-followed official Chinese manufacturing sector Purchasing Managers' Index slumped from a reading of 50.1 for April to a three-month low of 49.4 in May (consensus: 9.9), amid a drop in new orders, especially those from overseas clients.

Granted, analysts track the private sector compiled PMI (which was set for release on the following Monday) more closely because that from the government has sent false signals in the past.

"But for now, the official PMIs suggest that growth remains under pressure, consistent with our view that there are still some downside risks to near-term activity," said Julian Evans-Pritchard at Capital Economics.

Back on the home turf, according to data from Nationwide, UK house prices in Britain dipped at 0.2% month-on-month pace in May, dragging the year-on-year rate of growth down from 0.9% for April to 0.6% in May (consensus: 1.2%).

"[The] data confirm that house prices remain on an essentially flat trend, primarily because Brexit uncertainty has instilled some caution among buyers. The trend likely won’t improve in the next couple of months, given the political deadlock in Westminster," said Samuel Tombs at Pantheon Macroeconomics.

Against that backdrop, UK credit and mortgage lending data covering the month of April were set for release by the Bank of England at 0930 BST and it was a fair bet that policymakers on the Monetary Policy Committee would be watching the release quite closely.

Stateside meanwhile, data covering personal income and spending in April is due out, alongside the Chicago factory PMI for May and a final reading on the University of Michigan's consumer confidence gauge for May.

Balfour Beatty, the best of the lot

Infrastructure company Balfour Beatty announced on Friday that it has been conditionally selected in joint venture to deliver the $1.7bn (£1.3bn) Interstate 635 LBJ East project on behalf of the Texas Department of Transportation. The FTSE 250 firm said it had a 45% share in the joint venture, with Fluor Corporation holding 55%. Works would include the reconstruction and widening of 11-miles of the interstate highway around the north and east of Dallas in Texas, including the I-30 interchange, as well as the construction of service roads and numerous intersection improvements along the route.

Legal & General said it was selling its general insurance business to Allianz for a minimum £242m. The business comprises principally retail customers who hold household insurance policies. In 2018 gross written premiums were £410m and operating profit was nil, Legal & General said in a statement. It added that further potential payments could be made over a three year period from “ongoing commercial arrangements”.

Low cost airline Wizz Air said it was optimistic for the year ahead and would increase net profits after reporting full-year results in line with expectations. Wizz Air on Friday said it expected net profit in the range of €320m - €350m in the current financial year, after posting a 6% rise in net profit to €292m (£257m) in the 12 months to March 31.