City sources predict the FTSE 100 will open 18 points above yesterday's close of 6,834.26, ahead of the release of the most recent Bank of England (BoE) minutes and the release of UK unemployment figures.
In the US last night markets finished in a mixed fashion, with the gains on the Nasdaq and S&P 500
countered by a fall on the Dow Jones Industrial Average after big falls from some heavyweight constituents. Shares of IBM dropped 2.59% after the closing bell following the release of its latest quarterly results.
Britain's jobless rate is expected to fall to 7.3% in the three months to November from 7.4% the previous period, edging closer the central bank's 7% threshold at which it will consider raising interest rates.
The BoE has vowed to keep interest rates at record lows for an extended period until unemployment declines to at least 7%, but it is not a trigger.
According to Alpari UK Market Analyst, Craig Erlam: "With the unemployment rate fast approaching 7%, [...] the central bank is going to have to do something to reassure households, businesses and the markets that an increase in rates will not happen in the coming months."
The Bank's Monetary Policy Committee (MPC) earlier this month decided to keep interest rates at 0.5% and its quantitative easing programme at £375bn. The minutes from the January 9th meeting could shed further light behind the BoE's move.
Erlam added: "Among the rest of the data being released, we have the change in jobless claims, which is expected to be -35,000 and the average earnings data. The latter is very important for the UK economy going forward. With inflation now at 2%, people's real incomes are being squeezed significantly less than they have in recent years. However, people are still worse off every year as their incomes rise slower than inflation."
In company news, AstraZeneca and its partner Bristol-Myers Squibb have been granted marketing authorisation by the European Commission for Xigduo, its treatment of type 2 diabetes in the European Union. It is the first regulatory approval for a fixed dose combination treatment of its kind.
Software company Sage Group said it is trading in line with expectations with growth across all regions. The firm achieved a strong performance in the UK, Europe and Ireland, in part reflecting supportive changes in legislation. Mainland Europe improved despite tough market conditions on IT projects in France and Spain.
Whitbread, owner of the Premier Inn, Beefeater and Costa chains, confirmed that Chairman Anthony Habgood will step down from the board later this year and the process to find a successor is underway. Habgood, who has been Whitbread's Chairman since mid 2005, said: "With the company having a strong board and a clear strategy for growth, I believe that this year is an appropriate time to hand over to a successor."
BHP Billiton, the largest mining company in the world, maintained its full-year guidance for petroleum, copper, iron ore and coal production after a 'strong operating performance' in its first half. Chief Executive Andrew Mackenzie said that BHP's productivity continued to improve during the period: "Our productivity agenda is in full swing and we expect to carry strong momentum into the second half of the financial year."
Overnight analysts at UBS downgraded their view on RBS to 'sell' while at the same time lowering their price target on the lender's stock to 300p from 350p beforehand.