London pre-open: Stocks seen lower as investors digest GDP

London stocks were to fall at the open on Friday as investors digest the latest UK GDP reading.

The FTSE 100 was called to open 18 points lower at 6,719.

Figures released earlier by the Office for National Statistics showed Britain’s economy contracted by a less-than-expected 2.9% in January as the third national lockdown came into force.

Economists had forecast a month-on-month decline of 4.9%. The figure comes after a 1.2% expansion of gross domestic product (GDP) in December.

The services sector acted as the main drag on growth in January, decreasing by 3.5% as restrictions on activity were reintroduced in response to the coronavirus pandemic. The services sector was 10.2% below the level of February 2020 compared with 4.9% below the level seen in October 2020.

Britain was forced back into lockdown at the start of January to counter a rising number of Covid-19 cases, with schools and non-essential businesses shut.

In corporate news, luxury goods brand Burberry lifted full-year guidance after reporting a "strong rebound" in trading since December.

In an unscheduled trading update, Burberry said fourth quarter comparable retail sales were now expected to be 28% - 32% higher year on year. Group revenue was forecast to fall by 10% - 11% and adjusted operating margin in a range of 15.5% - 16.5%.

Elsewhere, Berkeley Group said it was on track to report annual pre-tax profit similar to the £504m achieved the year before based on "robust" trading in the four months to the end of February.

Forward sales are expected to be more than £1.7bn at the end of the year on 30 April putting the housebuilder in a strong position to start the next financial year.

Berkeley said it expected a similar level of profitability next year, underpinning its commitment to return £280m to shareholders each year.