The initial declines came after the International Monetary Fund lowered its forecasts for global growth from the 3.7% figure given in April to 3.4%, attributing the change to events in Ukraine and Iraq.

However, investors appear to be gearing up for this morning’s gross domestic product figure, which will offer the first estimate for the second quarter. The consensus is for growth of 0.8%.

GfK’s forward-looking survey on German sentiment in August increased to its highest level since December 2006. The index climbed to 9 from 8.9 the prior month, surprising analysts who had expected an unchanged result.

Also on today’s agenda is the July German IFO business climate survey, which is expected to fall to 109.4.

“However, following yesterday’s PMI readings I imagine most analysts will have raised their expectations for this and I think we’re likely to get a comfortable beat here,” Alpari Market Analyst Craig Erlam said.

“The only question now is how much more has been priced into the markets. I think temporary factors such as the world cup win and the good weather will have played into the stronger PMI readings yesterday and could therefore feed into today’s number. It now just remains to be seen whether this can produce a more long term boost to confidence or whether the end of the world cup signalled the end of this brief economic boost.”

Later on, US June durable goods orders data will be published and is expected to deliver a 0.5% increase in orders.

RBS races higher on H1 profit surprise

RBS delivered a better-than-expected first half operating performance, but said no one at the 80% taxpayer-owned bank was “complacent about the challenges ahead”.

The results, which came a week earlier than scheduled, showed operating profit totalled £2.6bn, or £3.3bn excluding restructuring and litigation and conduct costs, compared with £1.59bn in the same period a year earlier. The gains were driven by more favourable credit conditions and good results from RBS Capital Resolution, and came despite a 6% decline in total income to £9.9bn.

Barclays and Lloyds Banking Group were also higher on the news.

Lloyds’ gains came despite it confirming that it is in late-stage settlement discussions with a number of government agencies related to interbank rate setting procedures. It said the settlements had yet to be agreed, but it anticipates they will include penalty payments.

Pearson shares climbed despite the publishing group posting a fall in first half profit.

Vodafone was higher after the decline in its service revenue was lower than had been expected after the losses in Europe were partly offset by gains in African and India.

On the downside BSkyB failed to impress with its full year results and announcement that it is buying the entire stake of Sky Italia and a 57.4% interest in Sky Deutschland from Rupert Murdoch’s 21st Century Fox. The group will pay £2.45bn for Sky Italia and £2.9bn for Sky Deutschland.

The company reported a 7% increase in adjusted revenue to £7.6bn in the year ended June 30th 2014, as the firm added 342,000 new customers, the highest growth in client numbers in three years.

FTSE 100 – Risers
Royal Bank of Scotland Group (RBS) 375.80p +14.29%
Pearson (PSON) 1,137.00p +3.27%
Vodafone Group (VOD) 202.55p +2.38%
Lloyds Banking Group (LLOY) 75.49p +2.08%
Barclays (BARC) 218.85p +2.03%
Sainsbury (J) (SBRY) 321.20p +1.32%
Coca-Cola HBC AG (CDI) (CCH) 1,399.00p +1.30%
Standard Chartered (STAN) 1,220.00p +0.66%
easyJet (EZJ) 1,341.00p +0.60%
St James’s Place (STJ) 798.00p +0.57%

FTSE 100 – Fallers
British Sky Broadcasting Group (BSY) 903.00p -2.38%
Hammerson (HMSO) 594.00p -1.82%
Burberry Group (BRBY) 1,418.00p -1.73%
GlaxoSmithKline (GSK) 1,446.00p -1.60%
Petrofac Ltd. (PFC) 1,135.00p -1.48%
British Land Co (BLND) 722.50p -1.16%
Randgold Resources Ltd. (RRS) 5,010.00p -1.09%
Rexam (REX) 518.00p -1.05%
International Consolidated Airlines Group SA (CDI) (IAG) 339.40p -1.02%
Meggitt (MGGT) 525.50p -0.85%

Source: ShareCast