The FTSE 100 <.FTSE> index is seen opening up 28-30 points, or 0.6 percent on Thursday, according to financial bookmakers, with investors awaiting central bank rate decisions from both the Bank of England and the European Central Bank, in advance of a crucial EU summit outcome on Friday.
The Bank is expected to make no change to its monetary policy when its latest monthly decision is made at 12 p.m.
Economists expect the British central bank to keep interest rates at their record low of 0.50 percent and to wait before expanding its current asset purchase programme, which ends in February.
The ECB, however, is expected to cut rates and unveil a new package of bank aid, while investors will also look for any hint the central bank will intensify its bond buying support for the euro zone's struggling peripheral economies, setting the stage for Friday's critical euro zone summit.
French President Nicolas Sarkozy and German Chancellor Angela Merkel will propose to the summit a plan to impose mandatory penalties on euro zone states that exceed deficit targets, aiming to restore market confidence and prevent the region's debt crisis from spiralling out of control.
The UK blue chip index ended down 21.81 points, or 0.4 percent on Wednesday at 5,546.91, after a choppy session, reversing from an intra-day high of 5,631.88, as optimism about the outcome of the EU summit waxed and waned.
U.S. blue chips <.DJI> ended 0.4 percent higher on Wednesday, also after a volatile session, lifted by a media report -- later denied -- that the G20 was preparing a $600 billion lending facility for the International Monetary Fund (IMF) to help Europe.
Asian equities were weaker on Thursday with the MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> down 0.8 percent, while Tokyo's Nikkei share average <.N225> lost 0.7 percent.
Rumours and headlines could spark some volatility but the majority of traders are waiting for the official word from policy makers and also the response from S&P towards the summit, said Jonathan Sudaria, Night Dealer at Capital Spreads.
No major British economic data will be released on Thursday, while across the Atlantic the latest weekly U.S. jobless claims will be released at 1:30 p.m., with October U.S. wholesale inventories due at 3 p.m.
UK stocks to watch on Thursday are:
The bank said on Thursday that it expects pretax profit to rise by at least 10 percent this year to another record, helped by a strong performance in emerging markets such as Singapore and Hong Kong.
The retailer issues a third-quarter trading update.
Britain's second biggest drugmaker is cutting nearly a quarter of its U.S. sales force in a second wave of redundancies in as many months as it seeks to reduce costs, with about 1,150 sales representative and management jobs to be cut at a cost of between $50 million and $100 million, to be charged in the fourth quarter.
The oil firm was hit with five more safety citations from the U.S. government on Wednesday, while it also received the latest legal salvo from a major contractor, as it continues to deal with fallout from last year's massive oil blowout in the Gulf of Mexico.
Also, BP has discussed the outline of a possible settlement with its Russian billionaire joint venture partners in TNK-BP, The Financial Times said.
The bank has taken a dramatic step to stem the growing scandal over its mis-selling of long-term care bonds to elderly customers by offering to compensate investors who bought NHFA products long before the bank bought the scandal-hit investment adviser, The Daily Telegraph said
The publisher of the Yellow Pages directories is set to give its lenders more time to agree terms on a restructuring of its 2.6 billion pound, The Financial Times said.
The electronic components distributor posts third-quarter results.
The household products firm issues a trading update.
The equipment hire group reports second-quarter results.
The photo booths group unveils first-half results.
The luxury group delivers first-half results.
The social care services specialist unveils full-year results.
The global logistics provider posts full-year results.
The Australia-based energy firm holds its annual general meeting.
The base and precious metals explorer holds its annual general meeting.
The vetinary services group holds its annual general meeting.
The oil and gas explorer and producer holds its annual general meeting.
(Editing by David Cowell)