London pre-open: Flat start ahead of BoE and ECB decisions

City sources predict the FTSE 100 will open unchanged from yesterday's close of 6,721.78 as investors await fresh direction after the US ended last night's session mixed. Today will see the Bank of England most likely leave its monetary policy unchanged this month, which, as Craig Erlam, analyst at Alpari, said, "will come as no surprise to anyone, given the recent comments from the central bank, the falling inflation rate and improving economy". Although not expecting it to appear today, he did point out that one thing investors will be looking out for is a potential revision to the central bank's forward guidance. "Unemployment has fallen much faster than the central bank expected and now lies only 0.4% above the threshold that they previously claimed would be the point when they start to consider an interest rate hike. It is worth noting at this stage that they have repeatedly stated that this is just the point at which they'll consider it, it's not a trigger." Another key decision expected to day is from the European Central Bank (ECB), which comes after inflation declined once again in December to 0.8%. In November the ECB reduced its interest rates to a record low of 0.25%. Today's decision will be followed by President Mario Draghi giving his usual press conference, to which markets generally pay a great deal of attention. "With interest rates at 0.25%, the ECBs hands are a little tied when it comes to further rate cuts, which means if they want to provide further stimulus to slow down the rate of disinflation, they will have to explore other options, such as additional forward guidance, negative deposit rates, LTRO's or quantitative easing, although I think the last is very unlikely," Erlam added. Meanwhile, its already been a busy morning on the company front, with Marks & Spencer (M&S) posting a 1.8% rise in group sales in the third quarter, missing the UK retailer's expectations. In a trading update for the 13 weeks to December 28th, the company reported a 1.5% rise in total UK sales, down 0.2% on a like-for-like basis.Property development and investment company Hammerson has agreed to buy a majority stake in Saint Sébastien shopping centre in Nancy, North East France, from AXA Real Estate on behalf of one of its clients for £109m. The acquisition is part of Hammerson's focus on generating income growth through key retail destinations in the UK and France, it said. Bunzl, the FTSE 100 international distribution and outsourcing group, unveiled three new acquisitions which it made towards the end of last year. The company made the acquisitions in the safety sector in three different business areas and took its total acquisition spend for the year to around £290m. Confirming recent press rumours, Rolls-Royce admitted it had been in takeover talks with Finnish marine engine maker Waertsilae, but that these were now over. On the supermarket front, like-for-like sales slipped during the festive period for Tesco in what has proved to be a challenging time for all the large UK grocers. Providing encouragement, recently refreshed megastores have "significantly outperformed", online orders have increased and overseas performance has improved.Morrison has admitted that its sales performance over Christmas was 'disappointing' as it warned investors that profits would come likely come in at the bottom end of forecasts. Morrison, regarded as one of the 'Big Four' UK grocers behind Tesco, Sainsbury and Asda, said that total sales excluding fuel and VAT fell 1.9% in the six weeks to January 5th.NR