London pre-open: Stocks seen lower ahead of BoE rate announcement
The FTSE 100 was called to open 33 points lower at 6,045.
CMC Markets analyst Michael Hewson said: "There has been a lot of chatter in recent months about the likelihood of whether the Bank of England would go down the negative rate route, to the extent that it has become rather tedious, and a little predictable.
"While Bank of England officials have been careful not to rule out the possibility of such a move the reality is that any such move would be extremely damaging to the UK financial sector which makes up such an important part of the UK economy. At least the US Federal Reserve has implicitly ruled out the prospect of such a move, perhaps mindful of the damage it has done in Europe and Japan.
"No changes are expected today, however given the direction of travel of some of the data yesterday, particularly the sharp 5.8% fall in factory gate prices, some bank officials might be minded to be a little bit more dovish in tone in anticipation, that core prices could slip even lower than the 0.9% number we saw yesterday, and a headline CPI number that could slip closer to zero in the coming months.
"The only problem with an easier monetary policy stance is that while there is little leeway on rates, if the MPC were to do more QE, there's no guarantee it would boost demand."
The BoE rate announcement is due at midday.
In corporate news, Next upgraded its profit guidance after sales in the first half and beyond held up better than the company expected.
The FTSE 100 company increased its central guidance for annual pre-tax profit to £300m from £195m. Pre-tax profit in the six months to July fell to £9m from £320m.
Drugs maker Oxford Biomedica, which has partnered with pharma giant AstraZeneca to develop a Covid-19 vaccine, said it expected higher second half revenues to push it to a low-to-single digit full year profit.
The company, which is pinning its hopes on the AZD1222 trial treatment, said the drug could lift revenues by more than £10m "subject to successful scale up and regulatory approval ... early in the fourth quarter of 2020".
Interim operating losses before interest, tax, depreciation and amortisation came in at £0.4m compared with a loss of £1.4m a year ago. Revenue rose to £34m from £32.1m.