27th May 2025 06:47
(Alliance News) - Stocks in London are set to open higher on Tuesday following a long bank holiday weekend, as the EU progressed trade talks with the US and Nato eyes an increase in defence spending.
IG says futures indicate the FTSE 100 to open up 5.5 points, 0.1%, at 8,723.47 on Tuesday. The index of London large-caps closed down 21.29 points, 0.2%, at 8,717.97 on Friday.
UK shop price deflation was unchanged this month but food inflation increased, data published by the British Retail Consortium revealed on Tuesday.
Shop prices declined by 0.1% on an annual basis in May, the BRC said, unchanged from in April. Conversely, the food inflation rate was 2.8% on-year, accelerating from 2.6% in April.
"While overall shop prices remain unchanged in May, food inflation rose for the fourth consecutive month," commented BRC Chief Executive Helen Dickinson. "Fresh foods were the main driver, and red meat eaters may have noticed their steak got a little more expensive as wholesale beef prices increased."
Non-food prices, meanwhile, decreased 1.5% in May against a 1.4% decrease in April.
"Non-food prices remained in deflation, but this slowed in categories such as fashion and furniture as retailers began to unwind heavy promotional activity," Dickinson said. "Prices were falling faster for electricals as retailers tried to encourage spending before any potential knock-on impact from US tariffs."
Sterling was quoted at USD1.3547 early Tuesday, higher than USD1.3509 at the London equities close on Friday.
The euro traded higher at USD1.1373 early Tuesday, against USD1.1348 late Friday. Against the yen, the dollar was quoted up at JPY143.31 versus JPY142.70.
Following calls with US officials on Monday, EU Trade Commissioner Maros Sefcovic said the European Commission remained committed to reaching a trade agreement with the United States.
Sefcovic, in a post on the social media platform X, said that he had "good calls" with US Secretary of Commerce Howard Lutnick and Trade Representative Jamieson Greer, adding that the EU Commission will "stay in constant contact" with the US.
US President Donald Trump on Sunday extended the deadline for his planned 50% tariffs on EU goods to July 9, following a call with European Commission President Ursula von der Leyen.
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.6%, the S&P 500 shedding 0.7% and the Nasdaq Composite losing 1.0%. US markets were closed on Monday for Memorial Day.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 0.1%. In China, the Shanghai Composite faded 0.3%, while the Hang Seng index in Hong Kong was 0.2% lower. The S&P/ASX 200 in Sydney closed up 0.4%.
Nato Secretary General Mark Rutte expects members of the alliance to agree to raise their defence expenditure to 5% of economic output, he said on Monday at a gathering in the US.
A new target is set to be agreed at the Nato summit in the Dutch city of The Hague in June. An increase in spending would require a massive financial commitment by Nato countries.
Rutte said he expects that a higher target for defence spending will be agreed at the summit - "a total of 5%."
According to the Nato head, of that, significantly more than 3% would go towards traditional defence spending - internal documents mention 3.5%. The rest could go towards defence-related spending, such as military infrastructure, including railway lines, tank-compatible bridges and expanded ports.
Gold was quoted at USD3,325.18 an ounce early Tuesday, down from USD3,356.90 on Friday.
Brent oil was trading at USD63.72 a barrel early Tuesday, lower than USD64.71 late Friday.
In Tuesday's corporate calendar, Greencore Group releases its half-year results.
In the economic calendar on Tuesday, eurozone and German consumer confidence; CBI distributive trades from the UK; and the Redbook and house price indices from the US.
By Emily Parsons, Alliance News reporter
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