UK Stocks-Factors to watch on August 29

LONDON Fri Aug 29, 2014 2:39am EDT

LONDON Aug 29 (Reuters) - Britain's FTSE 100 index is seen opening up 2 to 6 points, or as much as 0.1 percent higher, on Friday, according to financial bookmakers. For more on the factors affecting European stocks, please click on

* Futures for the index were flat at 0636 GMT.

* The market focus was squarely on European Central Bank policy as investors awaited inflation figures for the euro zone, which may shed light on the bank's next move.

Euro zone inflation, due at 0900 GMT, is seen dropping to 0.3 percent in August, following a surprise dip to 0.4 percent in July, according to a Reuters poll of analysts.

The data will be at the centre of the ECB's policy meeting next week, fuelling the debate about whether the central bank should accelerate existing policy measures to fight the risk of deflation.

* The blue-chip FTSE 100 index, which on Wednesday had risen to its highest close since early July, ended down 24.86 points, or 0.4 percent, at 6,805.80 points on Thursday.

* The Ukrainian crisis was still at the forefront of investors' minds on Friday after Ukraine's president said Russian troops had entered his country in support of pro-Moscow rebels who captured a key coastal town.

* HOUSE PRICES: British house prices rose during August at a much faster monthly pace than expected, according to a survey that contrasted with other signs of cooling in the housing market.

Mortgage lender Nationwide said house prices rose 0.8 percent on the month in August compared with a 0.2 percent rise in July. Economists polled by Reuters had expected an increase of 0.1 percent.

* British consumer morale strengthened more than expected in August, matching June's nine-year high, as Britons became more confident about the economy and their financial prospects, a survey showed.

* TESCO : The supermarket group slashed its interim dividend by 75 percent, after tough operating conditions forced it to cut its trading profit outlook for the year.

* ROYAL DUTCH SHELL : The oil major has sought permission from the U.S. government to drill in the Arctic Ocean and is keeping open the possibility that it could drill there next summer, the Financial Times reported.

* HSBC : A U.S. regulator can proceed with lawsuits accusing HSBC Holdings Plc and Nomura Holdings Inc of misleading Fannie Mae and Freddie Mac into buying mortgage-backed securities that later turned toxic, a federal judge ruled.

* BARCLAYS : Barclays PLC has agreed to raise up to $275 million to fund Detroit's exit from municipal bankruptcy, according to a notice filed in U.S. Bankruptcy Court by the city.

* SCOTTISH INDEPENDENCE: Support for Scottish independence has risen by 4 percent after the final TV debate before a breakaway referendum in less than three weeks' time, one opinion poll showed, halving the anti-independence campaign's lead.

Also, Sir Mike Rake, president of the Confederation of British Industry, says Scottish secession will endanger the recoveries on both sides of the border, the Telegraph reported.

Separately, British Prime Minister David Cameron told Scots that much of their industry and more than one million jobs could be put in jeopardy if they vote next month to leave the United Kingdom.

TODAY'S UK PAPERS

> Financial Times

> Other business headlines Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News visit topnews.reuters.com (Reporting by Tricia Wright; editing by Blaise Robinson)

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