London pre-open: Stocks seen flat ahead of US inflation reading

(Sharecast News) - London stocks were set for a flat start on Friday as investors eyed a key US inflation reading. The FTSE 100 was called to open around two points higher.

Emma Wall, chief investment strategist at Hargreaves Lansdown, said: "Following a sideways day on Wall Street yesterday - the S&P 500 moved just 7 points, and the Nasdaq similarly unresponsive - Asian markets fell overnight. European stock futures are broadly flat.

"The spectre hanging over global markets is the inflation print from the US, the Core PCE Price Index (personal consumption expenditure) which is expected to come in at 2.8%. The previous print for August year on year was 2.91%."

The PCE reading for September is due at 1330 GMT.

Wall said: "Why does it matter? Those all-important interest rates, and the upcoming decision from the Fed committee next week. If the inflation print is hotter than expected, that could mean that the Fed holds rates - which would be bad news for stock markets. If inflation comes in as expected or - even better - below 2.8% that paves the way for a cut."

On home shores, the latest figures from Halifax showed that annual house price growth slowed in November to its weakest since March 2024 in the run-up to the Budget.

On the year, house prices were up 0.7% following 1.9% growth in October.

On the month, prices were flat in November, having risen 0.5% the month before.

Amanda Bryden, head of mortgages at Halifax, said the slowdown in annual growth "largely reflects the base effect of much stronger price growth this time last year".

She continued: "This consistency in average prices reflects what has been one of the most stable years for the housing market over the last decade. Even with the changes to Stamp Duty back in spring and some uncertainty ahead of the Autumn Budget, property values have remained steady.

"While slower growth may disappoint some existing homeowners, it's welcome news for first-time buyers. Comparing property prices to average incomes, affordability is now at its strongest since late 2015. Taking into account today's higher interest rates, mortgage costs as a share of income are at their lowest level in around three years.

"Looking ahead, with market activity steady and expectations of further interest rate reductions to come, we anticipate property prices will continue to grow gradually into 2026."

In corporate news, US supermarket chain Kroger is to pay $350m in compensation to Ocado for the closure of three warehouses, the UK online grocer and technology business said.

The payment also reflects Kroger's decision not to proceed with another customer fulfilment centre in Charlotte, North Carolina, one of the two planned CFCs due to go live in 2026.

Ocado earlier this month said Kroger's decision to fulfil online orders from its own stores in highly populated areas would cost it $50m in lost licensing fees.

Safety equipment and technology group Halma announced the £230m acquisition of E2S Group, a London-based manufacturer of industrial hazard detection devices.

The firm will sit within Halma's Safety Sector division and supports its ongoing expansion into the fire detection and alarm systems market.

Consumer goods giant Unilever said the demerger of its ice cream business, now named The Magnum Ice Cream Company, will be completed on 6 December.

Unilever said Magnum Ice Cream Company shares were expected to start trading on Euronext Amsterdam, the London Stock Exchange, and the New York Stock Exchange on 8 December.