London pre-open: Stocks to edge down ahead of expected ECB rate cut

(Sharecast News) - London stocks were set to edge lower at the open on Thursday following a positive close a day earlier, as investors eyed an expected rate cut by the European Central Bank.

The FTSE 100 was called to open down around 10 points.

Kathleen Brooks, research director at XTB, said: "For now, the ECB is winning the interest rate-cutting race. It is widely expected to cut rates by another 0.25% to 2% later today, which would be the eighth cut in a year and could see the main ECB interest rate fall to its lowest level since 2022.

"While other rate cuts are expected, we don't think that the ECB has too much room to cut rates further, even though clear signs are emerging that the ECB no longer has an inflation problem. Headline CPI retreated to 1.9% last month, and wage growth is slowing sharply. Unionised wage growth grew by 2.4% in Q1, down from a 4.1% growth rate in Q4 2024. This data sealed the deal on a rate cut for this month, and there is just over one further rate cut priced in by the market for the rest of 2025.

"There is a 54% chance of another cut in September. Once the ECB gets below 2% for interest rates, they will be in negative real interest rate territory. This could hinder euro strength, and it could also leave them without much ammunition If a trade agreement with the US does not lead to a large downward revision for tariffs."

In UK corporate news, bootmaker Dr Martens reported a slump in annual profits as new boss Ije Nwokorie said a turnaround plan would deliver a return to earnings growth in 2026.

Pre-tax profit for the year to March fell to �8.8m from �93m as revenue dived 10% to �787.6m against a challenging macroeconomic and consumer backdrop in several of the company's core markets.

Fintech giant Wise announced its intention to shift its primary listing from the UK to the US, saying the move would help accelerate growth and bring "substantial" strategic benefits to the business and its shareholders.

The news came as the cross-border payments firm delivered a 17% increase in underlying pre-tax profits to �282m, with revenues rising 15% to �1.21bn.

Elsewhere, outsourcer Mitie said it has agreed to buy Marlowe in a �366m deal.

Under the terms of the acquisition, Mitie will pay 1.1 new Mitie shares and 290p per share in cash.

This is a premium of about 26.5% to the closing Marlowe share price on Tuesday, which was the last day before market speculation of an approach.