London pre-open: Stocks seen muted as Trump ramps up rhetoric against Iran

(Sharecast News) - London stocks were set for a muted open on Thursday as Donald Trump ramped up his rhetoric against Iran.

The FTSE 100 was called to open around two points higher.

The US president said in a post on Truth Social on Wednesday: "No one has given the Islamic Republic of Iran a greater opportunity to make a Deal than me. TRAGICALLY, for them, they have failed to take it. Therefore, today, I am announcing the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY! This will be Economic Warfare and Isolation on an unprecedented scale.

"Today, I am also announcing that ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences."

Investors will also be digesting minutes from the Federal Reserve's latest meeting, released overnight. Danske Bank said they contained no major surprises.

"Views on inflation diverged, with 'many' participants assessing that 'policy tightening would likely be necessary if inflation did not decline'. Some also noted that financial conditions might not be sufficiently restrictive to return inflation to 2%, consistent with hold-voters signalling openness to future hikes following the meeting," it said.

"AI was also discussed, though conclusions remained mixed, with hawks pointing to upward demand pressures and doves emphasising longer-term productivity gains. Chairman Warsh flagged the possibility of reducing meeting frequency to six per year from the current eight, though no decisions were taken and any change would not affect the 2026 schedule."

On home shores, the latest Consumer Sentiment Monitor from the British Retail Consortium showed that consumer confidence improved in August, with expectations for the economy, personal finances and retail spending all strengthening over the month.

The BRC-Opinium survey showed expectations for the state of the economy over the next three months rising to a net balance of -28 from -36 in July, while expectations for personal finances improved to -9 from -12.

Retail spending expectations climbed more sharply, with the net balance rising to +8 from +1, while overall spending expectations edged up to +15 from +13. Expectations for saving slipped to -5 from -4.

"Consumer sentiment continued to rise with confidence in the economy hitting its highest level since the historical lows reached at the start of the Iran conflict. Expectations for personal finances saw a small improvement, driven by an optimistic Gen Z," said Helen Dickinson, the BRC's chief executive.

"The Burnham administration is enjoying a honeymoon boost driven by less pessimism about the outlook, but maintaining that momentum will depend on whether the Government can ease the pressure on household budgets."

Dickinson said that the upcoming Autumn Budget in late-October will be the "acid test of this government's real commitment to growth", calling on the government to reduce retail business costs, from energy bills to business rates.

"A Budget that backs retail and reduces costs is a pro-consumer Budget," she said.

In corporate news, retailer JD Sports Fashion reported a drop in second-quarter sales and lowered its fullyear profit guidance, pointing to a stillpromotional market and softer consumer demand across key regions.

JD Sports said Q2 organic revenues fell 1.3%, widening from the 0.1% decline seen in Q1, while likeforlike sales were down 3.1% against a 2.5% fall in the prior quarter. Given underlying H1 trends and a promotional market that may persist into H2, JD now expects FY27 pretax profit of £700m to £800m, down from £750m to £850m previously.

Standard Life announced the launch of a UK pension risk transfer partnership with a consortium of firms, including Goldman Sachs, with a combined initial capital commitment of up to £2bn.

The UK insurer said it is partnering with CVC Capital Partners, Prudential Financial, Goldman Sachs, MS&AD Insurance Group and other long-term institutional investors to expand its pension risk transfer business to support schemes across a broader range of defined benefit pension schemes. Standard Life will commit £500m over five years, funded from excess generation.