London pre-open: Stocks to edge lower ahead of GDP data
London stocks were set to edge lower at the open on Wednesday as investors eye the release of third-quarter UK GDP data.
The FTSE 100 is expected to open 12 points lower at 7,514.
CMC Markets analyst Michael Hewson said the pound’s weakness on Tuesday was primarily a result of jitters about the prospect of there not being a rate hike next week.
“Reiterating his remarks from Monday, Bank of England deputy governor Jon Cunliffe threw more shade than light on the prospects for a rise in interest rates at next week’s Bank of England rate meeting and inflation report. His comments that a rate move remains an open question are in recent contrast to market expectations of a move next week, which are still priced at over 80%,” he said.
“Next week’s decision looks increasingly likely to be a split decision, however it would be a big surprise if the bank decided to pull back from a rate move at this late stage, particularly since today’s first iteration of Q3 GDP is expected to show that the economy grew at 0.3%. Index of services is expected to contribute 0.4% to that number on a quarterly basis, while manufacturing is also expected to put in a strong showing if recent private survey is anywhere near an accurate guide.”
The GDP data is due at 0930 BST, along with BBA mortgage approvals.
In corporate news, Lloyds Banking Group continued its steady improvement in the third quarter and with capital generation now expected to be higher over the year it made encouraging sounds about dividends.
For the three months to 30 September, income increased 8% to £4.62bn and underlying profit before tax grew 9% to £2.08bn, which was in line with the consensus City forecast.
Drax announced that it has agreed the sale of Billington Bioenergy, a distributor of wood pellets in the UK heating market, to Aggregated Micro Power Holdings, an AIM-listed energy company specialising in the sale of wood fuels and the development of distributed energy assets, including biomass boilers and battery storage.
The FTSE 250 firm said consideration for the transaction would be £2m, comprised of £1.6m of shares in AMPH and £0.4m of cash.
Tritax Big Box has completed contracts with ProLogis European Finance XI Sarl to acquire two modern big box logistics facilities at Prologis Park, Stoke-on-Trent, Staffordshire, let to Marks and Spencer and Dunelm, it announced.
The real estate investment trust said the combined net purchase price was £78.5m, and would be funded from equity.