London pre-open: Stocks to rise ahead of US inflation; NatWest in focus

(Sharecast News) - London stocks were set to rise at the open on Friday following a weaker close in the previous session, as investors eyed NatWest results and the latest US inflation reading.

The FTSE 100 was called to open around 12 points higher.

The US consumer price index for January is due at 1330 GMT.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Both headline and core inflation are expected to have eased in January - moving closer toward the Federal Reserve's (Fed) 2% policy target. If inflation eases, the Fed will be in a better position to lower rates and give some relief to the economy that's rattled by AI concerns, and job losses that could follow... if AI doesn't take people's jobs, possible bankruptcies due to AI could.

"So the thinking goes: a set of soft - and ideally softer than expected - CPI update could pull yields lower and throw a floor under the equity selloff. While a set of stronger than expected CPI figures could inject further stress into the market, and trigger a further selloff."

On home shores, industry data out earlier showed that retail footfall softened slightly in January, although the pace of decline was a notable improvement on December.

According the latest BRC-Sensormatic footfall monitor, total UK footfall fell 0.6% in January year-on-year, as stormy winter weather kept shoppers at home. However, it was a notable improvement on the previous month's 2.9% slide.

Leading the rebound were retail parks, where footfall rose 1.1% following a 2.5% fall in December. Shopping centres were also stronger, with footfall down just 0.8% compared to December's 5.1% slump.

However, shoppers continued to avoid high streets, where footfall compounded December's 0.9% decline and fell 1.9%

Andy Sumpter, retail consultant, EMEA, at Sensormatic, said: "January offered a welcome reset. Shopper traffic remained in negative territory, but the dial moved in the right direction, marking a clear improvement on December and the wider golden quarter.

"Some of this uplift will have been driven by savvier spending behaviours, as consumers took advantage of new year promotions and sought out value after a stretched festive period."

However, Sumpter acknowledged that Storm Goretti had "put a dampener on activity...disrupting travel and suppressing visits - a reminder that weather can play an outsized role in shaping shopping behaviour".

Helen Dickinson, chief executive of the British Retail Consortium, said: "Although footfall edged down, it was much better than the disappointing Christmas period.

"An uptick in consumer confidence and possible signs of a footfall recovery offer some cautious optimism for some Spring-like green shoots."

In corporate news, NatWest reported a better-than-expected increase in full-year profits and lifted performance targets.

Pre-tax operating profit in the 12 months to December jumped 24.4% to �7.7bn, beating the �7.5bn forecast by analysts, according to a company-compiled consensus.

NatWest said it now expected a return on tangible equity of more than 18% in 2028, up from previous guidance of greater than 15% in 2027.