London pre-open: FTSE to continue lower ahead of rate decision

UK stocks are expected to continue to slide lower on Thursday, tracking losses seen in Asia and the US overnight and ahead of the European Central Bank (ECB) rate decision.

City sources predict the FTSE 100 will open around 18 points lower than yesterday's close of 6,557.52.

Although the ECB is not expected to adjust its current rate, there is speculation that Thursday could see the announcement of a full quantitative easing programme.

That comes after concerns about the end of the bond buying programme in the US knocked confidence in both the States and Asia, with stock markets in the latter falling for a fifth consecutive session.

Sentiment in the region has continued to be further weakened by the pro-democracy protestors in Hong Kong, who have promised to step up their protests ahead of the deadline given for the resignation of the region's chief executive, Leung Chun-ying.

"US markets fell aggressively overnight with the Dow losing 1.4% due to markets finally realising that the QE stimulus package is about to end," Alpari market analyst James Hughes said.

"The major story today is of course the ECB rate decision, and while we expect no movement in rates it is the potential start of a full blown QE program that has got grabbed the markets attention."

Although he doesn't expect to see a QE programme announced at the meeting, he does expect this to upset the markets, "especially after the CPI readings earlier in the week".

He continued: "We have seen rate cuts, long-term refinancing operations (LTRO) and targeted LTROs as well as many more initiatives over the last few months, all of which have made no difference to the ultra-low inflation figure that Mario Draghi and the ECB are desperately trying to drag higher. It is plain to see now that only a full blow round of government bond buying will appease the markets."

In company news, TUI Travel said its full year underlying operating profit growth would be towards the upper end of its previous guidance after a solid finish to the year.

Print-head maker Xaar has again warned on profits for both the current and next full year as a further slowdown in Chinese tile production activity has hit demand for its products. A third-quarter update explained that sales for 2014 are now expected to be 5-10% below the recent profit guidance of £115-125m, with profits likely to be materially lower due to the company's high operating leverage.

Housebuilder Galliford Try has been appointed by the Education Funding Agency (EFA) as selected panel member for the Greenwich, Lewisham and Croydon Priority School Building Programme batch, worth more than £45m. It marks Galliford Try's third success since being appointed to the EFA's main contractor framework last year.

It was a strong performance from clothing retailer Ted Baker in the 28 weeks ended 9 August, with revenue up 17% to £182.2m and profit before tax jumping 33.8% to £15.6m. The group also increased its dividend payment by 18.9% to 11.3p.