London pre-open: Stocks to rise ahead of BoE announcement
London stocks were set to rise at the open on Thursday as investors eyed the latest Bank of England policy announcement.
The FTSE 100 was called to open 20 points higher at 7,423.
Ahead of the BoE rate decision at midday, market participants were mulling the latest policy announcement from the Federal Reserve out overnight.
CMC Markets analyst Michael Hewson said: "Not surprisingly rates were left unchanged, however there was a dissenting view in the form of St. Louis Fed President James Bullard who called for a 25 basis points cut in the Fed funds rate.
"In terms of the outlook for the economy, the Fed kept its growth forecast unchanged, but did downgrade its inflation forecast, from 1.8% to 1.5%, while the dot plots for this year showed no change to the rate path.
"The statement was also a lot more dovish in its outlook, the FOMC citing 'uncertainties about the outlook' increasing. Against that backdrop the committee said they would closely monitor the implications of incoming information and act as appropriate to sustain the expansion, in light of muted inflation pressures."
On home shores, the BoE is expected to stand pat on rates.
Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: "There is no clear consensus about what the BoE should do next. Both the hawkish and the dovish camps have valuable reasons to think that the UK rates should move up or down respectively."
"The hawks believe that the softer pound should continue pushing the consumer prices above the bank’s 2% target and that the BoE should tighten its policy to maintain the price stability. The doves, on the other hand, believe that the actual dovish shift across the G7 central banks combined with the Brexit uncertainties require an accommodative monetary policy for a longer period."
In UK corporate news, Dixons Carphone, which owns Carphone Warehouse and Curry's PC World, warned its UK mobile division would remain 'significantly loss-making' this year and group pre-tax profits fell to £298m from £382m.
Homewares group Dunelm said it expected pre-tax profits to be ahead of expectations driven by good weather and strong trading across its businesses.
The company forecast pre-tax profits to be in the range of £124 - £126m compared with £102m in 2018.
“Since we last updated on 10 April 2019, we have seen very good year-on-year total like-for-like (LFL) growth, particularly in May and June, reflecting both the soft comparator period (Q4 2018 Total LFL growth of 0.1%) and the unseasonably favourable weather conditions this year,” the company said in a trading statement.
Student accommodation developer and manager the Unite Group said it had received resolution to grant planning permission for its 913-bed student accommodation development in Middlesex Street in London.
The FTSE 250 company said the consent remained subject to approval from the Greater London Authority, which was expected in the next few weeks. It explained that the site occupied a “prime” location in central London, and would provide “much-needed accommodation” for students.
Meggitt said it had signed an agreement with aircraft maintenance, repair and overhaul provider Lufthansa Technik. The FTSE 250 company said under the deal, the partnership would provide “comprehensive” component maintenance, repair and overhaul services for commercial aircraft in mainland China.