London stocks were set for a weaker open on Thursday as investors digested a policy announcement from the Federal Reserve and looked ahead to the European Central Bank's decision later in the day.
The FTSE 100 was called to open 25 points lower at 7,678.
As expected, the Fed hiked interest rates by 25 basis points on Wednesday, for the second time this year. The central bank also upgraded its forecasts for this year and the next and said it expects to deliver another two rate hikes this year and three in 2019.
London Capital Group analyst Jasper Lawler said: "Whilst the Fed's second rate rise this year was broadly expected, the central bank's increasingly hawkish tone came as a bit more of a surprise, sending US equities and treasuries lower, whilst also causing a brief spike higher in the dollar. The US economic outlook has improved with the Fed expecting a continued fall in unemployment to 3.5% and a rise in inflation (PCE ) to 2%.
"The upbeat outlook from the Fed, along with the bank's more aggressive stance, of four hikes rather than three previously expected across the year, raised concerns over higher borrowing costs, which dragged the markets lower. These same concerns, coupled with further trade war talk from the White House saw a mixed performance from Asia, whilst Europe is also set for a softer start."
On the UK data front, retail sales at 0930 BST will be the main event. But investors will also watch for the ECB rate decision at 1245 BST amid expectations that it will make an announcement about quantitative easing tapering.
In corporate news, Rolls-Royce has announced 4,600 job cuts - mainly in the UK - to save £400m a year in the latest round of restructuring under chief executive Warren East.
The aero-engine maker will cut support staff and management over the next two years with a third of the jobs disappearing by the end of 2018. The cost of the restructuring will be £500m.
Consumer products peddler PZ Cussons updated the market on its trading on Thursday, reporting that during the last few months of the year to 31 May, performance in the UK had been in line with its revised, tighter expectations.
The FTSE 250 company said that whilst trading conditions in Nigeria had tightened further, expected profit before tax for the full year would still be in the range previously indicated, albeit towards the bottom end of the range. Results in the group's other markets remained "robust" with performance in Australia, Indonesia and the group's beauty division ahead of the prior year.
Anglo American has agreed to sell a stake in its Quellaveco copper project in Peru to Mitsubishi Corporation for $600m.
The company will give up a 21.9% equity interest in the mine's holding company to add to the 18.1% interest already owned by the Japanese conglomerate, leaving Anglo with 60%.