London Report: Data suggests UK economy is in good health
THE UK economy is showing improving health, according to statistics out this week that are expected to reveal growth throughout the second quarter.
The economy is forecast to have grown 0.6 per cent in the second quarter, accelerating from 0.3 per cent in the first three months of the year. The Office for National Statistics (ONS) publishes its first estimate of the data on Thursday.
“The swing factor is construction output, which we expect to have added nearly 0.2 percentage points (pp) after subtracting 0.2pp in the first quarter. Partly offsetting this is the absence of support from mining, which is still strong relative to its well established declining trend,” said economist Philip Rush from Nomura.
Market watchers will be checking the deluge of corporate results this week to see if those figures match the upbeat forecast.
The corporate week starts today with figures from Anglo Platinum.
Tomorrow Sage, Beazley, Carpetright and Croda provide their data.
On Wednesday British Land, Compass, Kingfisher, Easyjet, ARM and GlaxoSmithKline (GSK) are all due to update the market.
GSK’s boss Andrew Witty will use the chance to face critics about the British pharmaceutical firm’s involvement in a Chinese corruption scandal.
Chinese authorities are investigating GSK deals with travel agencies worth up to ¥3bn that they allege were used to facilitate bribes. Although an internal company investigation has yet to conclude, the scandal has rocked GSK’s reputation and left its management in China in disarray.
On Thursday it is a bumper day for results, with numbers from Rolls Royce, SSE, SABMiller, BT, Travis Perkins, Capita, Reed Elsevier, Unilever, Shire, Credit Suisse, Kazakhmys, Lazard, Randstad, Statoil and Travis Perkins.
Hibu is also set to reveal its long-delayed results and is expected to give details of a debt for equity swap.
On Friday United Utilities, Pearson, BSkyB, Anglo American and BG Group will all update the market.
Numis rates BSkyB for its final report with a “buy” rating and a target price of 1,020p based on general progress within the company. The analyst says although the market was unsettled by the announcement BT would bundle BT Sports with its broadband product, the details “make the offer less attractive than it initially appears”.