London pre-open: Stocks to fall as investors mull Trump tariff announcements

(Sharecast News) - London stocks were set to fall at the open on Friday as investors mulled US President Trump's latest tariff announcements. The FTSE 100 was called to open around 35 points lower.

Stephen Innes, managing partner at SPI Asset Management, said: "Trump's new tariff directive, signed behind closed doors just ahead of the August 1 deadline, slaps a new floor under global trade costs: a 10% minimum rate for nearly all partners, with surcharges of 15% or higher for surplus nations.

"Canada drew particular ire, with rates ballooning to 35% on certain goods - a pointed jab at America's northern neighbour wrapped in fine print. In all, 40 countries face a straight 15%, while a dozen more received bespoke punishment based on their trade balance or lack of diplomatic agility.

"This wasn't just an update - it was a structural rewrite. The average US tariff jumps from 13.3% to 15.2%, a seismic shift from the 2.3% average before Trump retook office. This reshapes the cost calculus for everything from semiconductors to copper pipes. Markets may not have puked on the headline, but pricing power is shifting - and fast.

"Trump's latest move isn't a tariff tantrum. It's a pivot to what the White House is calling 'reciprocal trade architecture'. Industrial powers like the EU, Japan, and South Korea swallowed 15% across-the-board duties in exchange for automotive tariff relief. Others - like Taiwan, South Africa, and Thailand - weren't as lucky, hit with 20-30% levies. Lesotho dodged a 50% bullet and ended up with a 'merciful' 15%, outperforming its regional overlord, South Africa."

On home shore, the latest data from Nationwide showed that house price bounced back in July.

House prices rose 0.6% on the month following a 0.9% decline June. On the year, prices rose 2.4% in July following 2.1% growth the month before.

The average price of a home stood at £272,664 last month, up from £271,619 in June.

Nationwide's chief economist Robert Gardner said: "Looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well. Indeed, 64,200 mortgages for house purchase were approved in June, broadly in line with the pre-pandemic average, despite the changed interest rate environment.

"After deteriorating markedly in the wake of the pandemic, housing affordability has been steadily improving, thanks to a period of strong income growth alongside more subdued house price growth and a modest fallback in mortgage rates."

He continued: "Despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.

"Unemployment remains low, earnings are still rising at a healthy pace (even after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little further if Bank Rate is lowered further in the coming quarters as we, and most other analysts, expect.

"Providing the broader economic recovery is maintained, housing market activity is likely to continue to strengthen gradually in the quarters ahead."

In corporate news, IMI reiterated its full-year guidance after a broadly stable first half, with the engineering business hailing "strong momentum" heading into the second half.

The company, which builds products used in fluid and motion control applications, reported revenues of £1.09bn for the six months to 30 June, down 1% on last year due to currency movements, though operating profits rose 1% to £198m, helped by an improvement in operating margins.

On an organic basis, revenues rose by 2%, with the company expecting growth to pick up to a mid-single digit rate for 2025 as a whole.

Educational publisher Pearson said it was on track to meet full-year forecasts as it reported a 2% rise in adjusted half-year operating profit.

The company said earnings for the first six months of the year came in at £242m, while sales on an adjusted basis were also up 2%, at £1.72bn. Pearson added that it expected stronger sales growth in H2 and the fourth quarter in particular.