London pre-open: Carney hints at turn-of-the year move in Bank Rate
The top flight index is being called to start the day about 0.2% lower despite strong overnight gains on Wall Street following hawkish remarks overnight from the Governor of the Bank of England.
Speaking on Thursday evening Mark Carney, said: “In my view, the decision as to when to start such a process of adjustment will likely come into sharper relief around the turn of this year.”
The yield on the benchmark 10-year Gilt ended the session negligibly lower, at 2.08%, before the BoE chief’s remarks and was little changed afterwards.
“Mr. Carney’s comments suggest that an interest rate hike is likely around the turn of the year,” said Dr. Howard Archer, Chief UK economist at IHS Global Insight in a research note sent to clients.
Acting as a backdrop, the German Bundestag will vote on Friday on whether or not to back new financing for Greece.
“The final bailout agreement and the way it was reached has probably raised more questions than it’s solved for the long-term future of Europe. In the short-term though, with Greece fixed, or at least plastered over, market attention is shifting back to the central bank outlook and corporate earnings,” wrote Jasper Lawler, Market Analyst at CMC Markets.
A raft of US economic data will be published later in the day including the latest figures on consumer prices and the University of Michigan’s latest reading on consumer confidence.
M&S's Dixon to step down
Online gambling company 888 Holdings has agreed to buy Bwin.party Digital Entertainment in a cash and stock deal worth around £898.3m, beating a rival offer from GVC. Bwin shareholders will receive 39.45p and 0.404 new 888 shares for each share they own.
Based on 888's closing price on Thursday of 160p, the offer represents a value of around 104.9p per Bwin share, which is a premium of approximately 16.4% cent to the closing price of Bwin on 14 May, which is the last business day before Bwin announced talks about a possible tie-up.
Marks & Spencer said John Dixon, the executive director of its general merchandise division, will step down from the board with immediate effect and leave the company on a day to be agreed, to pursue other career opportunities. Steve Rowe will take on responsibility for the general merchandise business, while Andy Adcock, who is currently trading director of the food division, will step up to be the director of Food.
IAG moved closer on Thursday to clinching a takeover of Aer Lingus after receiving the US regulator’s go-ahead and the Irish carrier’s shareholders backed special resolutions linked to the deal.