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London pre-open: Stocks seen higher ahead of inflation figures
London stocks were set for a positive open on Tuesday following an upbeat session in Asia, as investors eyed the latest inflation figures.
The FTSE 100 was expected to open 15 points higher at 7,774.
The main focus on the economic front will be the retail price index, producer price index and consumer price index for December at 0930 GMT.
CMC Markets analyst Michael Hewson said: "Last month the Bank of England governor found himself having to pen a letter to the Chancellor of the Exchequer explaining the reasons as to why the Bank of England had exceeded its headline inflation target by more than 1%, after CPI came in at 3.1% for November, the highest level since March 2012. Later this morning we'll find out if the December numbers have fallen back from those heady peaks.
"While most expectations are for that indeed to be the case, with a drop back to 3%, one can't help feeling that this optimism might well be misplaced. Airfares were a key component that underpinned the CPI number in November and it is quite likely that could happen again, furthermore fuel prices also rose in December. The one bright spot could well be food and drink with shop price inflation expected to be on the soft side. Core CPI is expected to slip back a touch to 2.6% from 2.7%
"It seems more probable that inflation is likely to remain stickier than usual for the next couple of months as the January effect of higher rail fares also bleeds through into the numbers. It should then start to soften towards the end of Q1 assuming the pound stays at its current levels.
"Retail prices are expected to remain steady at 3.9%, while factory gate prices are also expected to soften a touch from 7.3% to 5.3%."
In corporate news, high street baker Greggs said full year total sales were up by a tasty 7.4% and company-managed shop like-for-like sales grew by 3.7%.
In the fourth quarter company-managed like-for-like sales grew by 3%, reflecting a "particularly favourable" trading pattern in the final quarter of 2016. It expected full year results to be in line with expectations.
Provident Financial reported a loss from its home credit business at the larger end of expectations and said its Vanquis Bank took 20% fewer new customer bookings in the fourth quarter compared to last year.
Vanquis Bank and Moneybarn both began "dialogue" with the financial regulator over their respective investigations, while there was "progress reported on finding a new permanent chief executive.
Halma expects the recently enacted US tax cuts and to positively impact its future US after tax adjusted earnings and provide a £15m non-cash credit the year to March 2018.