London pre-open: Stocks to nudge up as sterling hit by Bailey comments
London stocks were set to nudge up at the open on Thursday, benefiting from a weaker pound, as investors remained cautious amid the escalating conflict in the Middle East.
The FTSE 100 was called to open up around five points higher, with sterling under the cosh after Bank of England governor Andrew Bailey told the Guardian that the central bank could become a "bit more aggressive" in cutting interest as long as news on inflation continued to be good.
Bailey told the Guardian he has been encouraged by the fact that cost of living pressures had not been as persistent as the BoE thought they might be.
He said in an interview that if the news on inflation remained positive there was a chance the Bank could become "a bit more activist" in its rate-cutting approach.
The pound was down 0.7% against the dollar at 1.3170.
A weaker sterling tends to lift the FTSE 100 index, as around 70% of its constituents derive their earnings from abroad.
In corporate news, Tesco lifted its annual profit guidance despite a slight slowdown in underlying sales growth in the second quarter.
Due to stronger-than-expected volumes in the first half, which the grocer put down to its ongoing investments in "value, quality and service", retail adjusted operating profit for the year ending 24 February was now expected to be £2.9bn, up from earlier guidance of at least £2.8bn and higher than last year’s £2.76bn.
SSP Group said it expected to deliver a large jump in full-year profits, despite weaker trading in Continental Europe, especially in France where demand during the Olympics was lower than anticipated.
The company, which operates food outlets at train stations and airports, said core profits for the year to September would come in at £350-360m, up from the £280m reported a year earlier and lower than planning assumptions of £375m at the top end.
Telecom Plus reported strong growth for its first half, with customer numbers increasing 67,000, and services supplied rising by 139,000 to 3.266 million.
The FTSE 250 company, which trades as Utility Warehouse, said it had now maintained double-digit percentage customer growth for three consecutive years, despite fluctuating energy prices.
It said it remained confident in meeting its full-year targets for customer growth of 12% to 14%, and adjusted pre-tax profits of £124m to £128m, with its half-year results expected in November.