London pre-open: Stocks to edge up ahead of BoE announcement
London stocks were set to edge higher at the open on Thursday, supported by hopes of a Brexit deal and further US stimulus, as investors eyed the latest policy announcement from the Bank of England.
The FTSE 100 was called to open 13 points higher at 6,584.
CMC Markets analyst Michael Hewson said the BoE is not expected to take any action on monetary policy given that it acted last month, by adding an extra £150bn of QE, while "EU/UK trade negotiations appear to be reaching some form of denouement".
"There has been some idle chatter about the prospect of negative rates in the past couple of weeks, however with the latest PMIs looking a little more resilient than expected in the last few weeks, it's unlikely that the Bank will make any serious mention of them on this occasion, given that it seems possible we could see a landing zone for an EU/UK trade deal in the coming days," said Hewson.
"Furthermore, when the central bank meets for the first time in 2021, the MPC is much more likely to have a better idea of where the UK economy is in relation to further restrictions, as well as having a clearer route map for vaccinations, as well as the extent of the new EU/UK trade relationship."
In corporate news, travel food outlet operator SSP Group said it expected an 80% fall in first quarter sales as the second wave of Covid-19 hit its UK and European markets with volatility continuing into the second three months of the financial year.
The owner of Upper Crust reported an annual loss of £425m compared with £197.2m profit as the pandemic battered that global travel industry.
Revenue slumped 47% on a constant currency basis to £1.43bn.
"We are optimistic that, alongside the roll out of the Covid-19 vaccination programmes, we will start to see a recovery in travel in the second half of the new financial year," the company said.
WPP said it would increase its dividend each year starting in 2020 and pay out about 40% of headline earnings per share.
The advertising company said it would cut £600m of annual costs by 2025 and spend up to £400m a year on acquisitions as it set out a strategy for growth. WPP said it would reinvest about two-thirds of the cost savings to support growth.