London pre-open: Stocks seen flat as investors mull Nationwide data, China PMI

The FTSE 100 was called to open flat at around 8,287.

There was nothing of note out on the corporate front, but data from Nationwide showed that house prices rose 3.7% on the year in November, up from 2.4% the month before. This marked the fastest annual growth since November 2022.

On the month, they were up 1.2%, having risen just 0.1% in October. This was the largest monthly gain since March 2022.

Nationwide chief economist Robert Gardner said: "House prices are just 1% below the all-time high recorded in the summer of 2022.

"The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels.

"The pickup in price growth is unlikely to have been driven by upcoming stamp duty changes, since the majority of mortgage applications commenced before the Budget announcement.

"Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the higher interest rate environment.

"Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady rise in activity and house prices since the start of the year. Household balance sheets are also in good shape with debt levels at their lowest levels relative to household income since the mid-2000s."

Investors will also be mulling the latest Confederation of British Industry Growth Indicator, which showed that UK companies expect 2025 to get off to a poor start, weighed down by rising labour costs and weak sentiment.

According to indicator, private sector firms expect activity to fall in the three months to February 2025, with a weighted balance of -10. It is the first time this year growth expectations have been negative.

Overall business volumes were forecast to ease, with a balance of -13. Business and professional services firms expected a more modest fall than those in consumer services, however, with contrasting balances of -7 and -33 respectively.

Away from services, and distribution sales were also expected to decline, with a balance of -20. But manufacturers were optimistic output would rise, albeit modestly, with a balance of 9.

The CBI said October’s Budget had hit sentiment across the private sector.

Alpesh Paleja, interim deputy chief economist at the CBI, said: "As we head into 2025, expectations for growth have taken a decisive turn for the worse.

"Anticipated activity was already weakening heading into the Budget, and the chancellor’s announcements have left businesses with even more tough choices to make.

"News that firms are planning to reduce headcount is a concern, with hiring intentions at their weakest since the tail-end of the pandemic. This could be an early sign of the impact of the higher labour costs from the upcoming rise in employer National Insurance Contributions, and the uprating in the National Living Wage."

Hiring intentions were at their weakest since January 2021, the CBI noted, with headcounts likely to be trimmed in the three months to February.

The CBI Growth Indicator is a composite index of CBI’s core business surveys: industrial trends, distributive trades and service sector. In total, it surveyed 889 firms between 25 October and 14 November.

A balance is the weighted percentage of companies reporting an increase minus those reporting a decrease.

Away from home, the latest data from Caixin and S&P Global showed that China’s manufacturing sector grew at its fastest rate in five months in November.

The manufacturing PMI rose to 51.5 from 50.3 in October, coming in ahead of the 50.5 consensus forecast.

This was the second straight month of expansion, helped by the highest rate of growth in foreign orders since February 2023.