London pre-open: Stocks to fall ahead of UK inflation data

UK stocks are expected to decline on Tuesday morning as investors await key consumer-price data, which is predicted to show that inflation eased further in December.

City sources predict the FTSE 100 will open 23 points lower than Monday’s close of 6,501.42.

Data due out at 09:30 is forecast to show that the annual rate of consumer-price inflation in the UK slowed to just 0.7% last month, from 1% in November. This would be the first time that inflation has fallen below 1% since June 2002.1

If confirmed, the figure will require Bank of England governor Mark Carney to write a letter to chancellor George Osborne explaining the deviation of over one percentage point from the 2% target.

Chinese economic data overnight, meanwhile, showed that the trade balance declined more than expected last month as export growth picked up sharply.

Stocks to watch

Morrison's chief executive Dalton Philips has been axed after delivering the worst Christmas performance of the Big Four supermarket groups. Like-for-like sales excluding fuel fell 3.1% in the six weeks to 4 January, although this was not quite as bad as the 3.8% decline that the analyst consensus had predicted, it was far in excess of the 0.3% decline at Tesco and Sainsbury's 1.7% slide.

Aerospace, defence and energy engineer Meggitt has won a $31.7m contract with the US Marine Corps for indoor simulated marksmanship training systems. Meggitt chief executive Stephen Young said: "Following our $99 million small arms trainer award for the US Army announced in 2014, this second major contract reinforces our product's system-of-record status.”

Despite a record Christmas, high street department store Debenhams has said that full-year margins will be at the lower end of guidance due to a strong sales of lower-margin products over the Christmas period and a challenging season in clothing. The company said the gross margin for the year ending August 2015 will likely be “towards the lower end the guidance of +10 to +40 basis points”.