(Alliance News) - Stocks in London are called to open lower on Thursday, while the pound was on the up, just hours before what is expected to be the Bank of England's 13th successive rate hike.
The BoE announces its interest rate decision at 1200 BST on Thursday. A hike by Threadneedle Street is a foregone conclusion. Wednesday's data means a half-point rate lift may be on the table, though a 25 basis point hike is largely expected.
According to the Office for National Statistics on Wednesday, the UK annual inflation rate was unchanged at 8.7% in May. Inflation had been expected to cool to 8.4%, according to market consensus cited by FXStreet, so the latest figure was hotter than forecast.
IG says futures indicate the FTSE 100 to open called down 48.5 points, 0.6%, at 7,510.68 on Thursday. The index of London large-caps closed down 10.13 points, or 0.1% at 7,559.18 on Wednesday.
Across the Atlantic, interest rate hikes are also on the horizon. The US Federal Reserve expects to keep raising interest rates, but at a slower pace, Fed Chair Jerome Powell told a congressional hearing.
"Given how far we've come, it may make sense to move rates higher but to do so at a more moderate pace," he told the House Committee on Financial Services.
The Federal Open Market Committee paused its aggressive campaign against inflation last week after 10 consecutive interest rate hikes, to give policymakers more time to assess the strength of the US economy.
"Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year," Powell said.
Sterling was quoted at USD1.2756 early Thursday, higher than USD1.2727 at the London equities close on Wednesday.
The euro traded at USD1.0988 early Thursday, up against USD1.0949 late Wednesday. Against the yen, the dollar was quoted at JPY141.72, lower versus JPY142.00.
In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.3%, the S&P 500 losing 0.5% and the Nasdaq Composite shedding 1.2%.
In Asia on Thursday, financial markets in Shanghai and Hong Kong are closed Thursday for the Dragon Boat Festival holiday. They remain closed in Shanghai on Friday but re-open in Hong Kong.
The Nikkei 225 index in Tokyo was down 0.7%. The S&P/ASX 200 in Sydney closed down 1.7%.
Gold was quoted at USD1,962.53 an ounce early Thursday, higher than USD1,930.37 on Wednesday. Brent oil was trading at USD76.65 a barrel, down from USD76.92.
In Thursday's UK corporate calendar, there are full-year results from packaging firm DS Smith and handbags seller Mulberry, and trading statements from hotel firm Whitbread and outsourcer Serco.
The economic calendar has an interest rate decision from the Swiss National Bank at 0830 BST, and the latest US jobless claims report at 1330 BST.
By Sophie Rose, Alliance News reporter
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