UK Stocks -- Factors to watch on May 14

LONDON, May 14 (Reuters) - British blue-chip shares are set for a decline at the start of trade on Wednesday ahead of results from supermarket retailer J. Sainsbury (SBRY.L: Quote, Profile, Research) and the Bank of England's quarterly inflation report.

Against a backdrop of flat global equity markets, financial spreadbetters expect London's FTSE 100 index .FTSE to open between 12 and 17 points lower this session, having closed down 8.7 points, or 0.14 percent, at 6,211.9 points on Tuesday.

The FTSE is still on course for a modest rise this week, although inflation at both the consumer and producer level is showing no signs of abating, while other data point to more deterioration in the housing market and a fall in retail sales as consumers feel the pinch of rising price pressures and high borrowing costs.

"A rebound in crude oil prices is also likely to be seen as a negative and end up weighing across many constituents - including the petrochemicals stocks as this now has the potential to squeeze demand - whilst earnings news from J Sainsbury will be keenly watched as the retailer should offer some insight on the health of the UK economy in light of rapidly increasing prices," wrote CMC Markets trader Matt Buckland in a note.

Crude oil futures CLc1 were trading roughly flat, but held around $125 a barrel, just shy of a fresh record high set at $126.98.

The energy sector could show some decline in regular trading on Wednesday as BP (BP.L: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research) (RDSb.L: Quote, Profile, Research) trade ex-dividend along with Sage Group (SGE.L: Quote, Profile, Research), which is expected to take a total of 11 points off the FTSE.

Along with Sainsbury, Land Securities (LAND.L: Quote, Profile, Research) and LogicaCMG (LOG.L: Quote, Profile, Research) also report results.

Miners could get a boost from BHP Billiton (BLT.L: Quote, Profile, Research), whose Australian-listed shares hit record highs (BHP.AX: Quote, Profile, Research) on Wednesday as traders cited talk of possible stakebuilding in the group by a Chinese entity. BHP did not comment.

On the macroeconomic front, the Bank of England releases its quarterly inflation report, which is likely to show that despite a slowing economy, the central bank may signal a lower risk of further interest rate cuts after the latest inflation data.