(Alliance News) - Stocks in London are set to open slightly higher on Tuesday, with testimony due from the Bank of England's governor, while figures show UK shop price inflation hit a record high this month.

IG says futures indicate the FTSE 100 index to open up 22.0 points, 0.3%, at 7,493.77 on Tuesday. The measure of London large-caps closed up 66.32 points, 0.9%, at 7,471.77 on Monday.

"After the big sell-off at the end of last week, European markets started the week in a positive fashion as the banking sector angst of the last few days eased slightly," said CMC Markets' Michael Hewson.

"Sentiment seems likely to remain on the cautious side over the next few days. This caution was reflected in the extent of yesterday's rebound in bank stocks given that none of the gains seen yesterday came close to reversing the losses seen from last Friday."

Barclays closed up 2.9% on Monday but had lost 4.2% on Friday.

The dollar was softer against major currencies early in London.

Sterling was quoted at USD1.2315 early Tuesday, up from USD1.2268 at the London equities close on Monday. The euro traded at USD1.0808, higher than USD1.0782. Against the yen, the dollar was quoted at JPY130.58, down versus JPY131.50.

In local economic news, UK shop price inflation intensified in March, figures showed, with food costs jumping at record pace.

According to the latest British Retail Consortium-NielsenIQ tracker, UK shop price inflation accelerated to 8.9% in March, from 8.4% in February. It takes the inflation rate to a new high, the BRC said.

Non-food price inflation quickened to 5.9% in March, from 5.3% last month. Food price inflation picked up to 15% in March from 14.5% in February. Fresh food price inflation accelerated to 17% from 16.3%.

They were the highest-ever rates of price inflation for food and fresh food in the UK, the BRC said.

Meanwhile, Sky News reported late Monday that high-street clothing and homewares retailer Next is in talks to acquire vintage brand Cath Kidston. Citing "banking sources", Sky said the deal is thought to be "likely but not certain" and could conclude as soon as Tuesday.

In the US on Monday, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.6%, and the S&P 500 up 0.2%. Banking stocks rallied but tech stocks struggled, with the Nasdaq Composite down 0.5%.

In Asia on Tuesday, the Nikkei 225 index was marginally higher. In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was up 0.8%. The S&P/ASX 200 in Sydney closed up 1.0%.

Gold was quoted at USD1,958.10 an ounce early Tuesday, up a touch from USD1,956.69 on Monday. Brent oil was trading at USD77.83 a barrel, higher than USD75.91.

On Tuesday, Bank of England Governor Andrew Bailey speaks before the UK's Treasury Committee at 0945 BST. There's also a US consumer confidence survey at 1500 BST, after a house price index reading at 1400 BST.

London's corporate diary has annual results from Iru-Bru-maker AG Barr, an interim report from housebuilder Bellway, and a trading statement from online grocer Ocado.

By Elizabeth Winter, Alliance News senior markets reporter

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