LONDON (ShareCast) - Gains are expected on the top tier index this morning, driven by a decent performance in the US ahead of both the minutes of the most recent Bank of England (BoE) meeting and the conclusion of the latest policy meeting of the US Federal Open Market Committee (FOMC).

City sources predict the FTSE 100 will open around 13 points higher than yesterday's close of 6,766.77.

Michael Hewson, Chief Market Analyst at CMC Markets UK, said: "The release of the latest Bank of England minutes have been widely speculated upon, after BoE governor Mark Carney’s speech at Mansion House last week, when he caught markets off guard with his comments that a rate hike may come sooner than markets expected.

"This rather sudden change of tone has been interpreted as an early indication that today’s minutes could see a split vote on the timing of an interest rate rise, and Governor Carney’s intervention an early warning of that. This speculation was reinforced by recent comments from Deputy Governor Charles Bean at the weekend, saying he would welcome a normalisation of interest rates."

Meanwhile, the Federal Reserve is expected to announce a further tapering of quantitative easing today when the central bank wraps up its policy meeting.

Analysts predict the Fed will cut $10bn off its monthly bond purchase programme and keep interest rates at 0.25%.

However, following Tuesday’s release of the latest consumer price inflation data, which showed prices rose more than forecast in the US, some analysts now believe the Fed may consider raising interest rates sooner than it had been expecting.

In Hewson's view, "of more importance will be whether the Fed downgrades its growth forecasts, in line with the International Monetary Fund earlier this week, as well as reducing its unemployment forecasts".

"The press conference may well offer some lines into the Fed’s thinking though Janet Yellen is unlikely to repeat her schoolgirl error in suggesting rate hikes might come within six months of tapering finishing," he added.

Back in the UK, it was revealed this morning that Countrywide and LSL Property are set to raise nearly £20m each from the sale of shares in Zoopla's initial public offering today, while Daily Mail & General Trust (DMGT) could make as much as £190m. Zoopla, the online estate agent portal, has set its offer price at 220p per share, giving it a market capitalisation of around £919m.

FTSE 250 home-shopping business N Brown said total group revenues for the 15 weeks to June 14th rose 2.6%, including like-for-like growth of 2.5%, in line with company expectations. The group said growth over the period was supported by the performance of its younger titles, Simply Be and Jacamo, which were up 6% and 10% respectively.

Mr Kipling Cakes-to-Ambrosia rice maker Premier Foods warned that sales of its key brands were likely to be flat this year, but said cost savings would still help it to report results in line with hopes.

NR

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