The Bank of England's Monetary Policy Committee (MPC) will be revealing its policy decision at midday on Thursday with the majority of economists expecting the Bank of England (BoE) to ramp up its asset purchase programme, or quantitative easing (QE).
Analysts at Investec are predicting that the MPC will signal a further £50bn of QE, taking the total asset purchase programme to £375bn. However, they think that a Bank rate cut from the current historically low level of 0.5% remains "off the cards".
Analysts at Barclays Capital (BarCap) are also plumping for a £50bn increase in QE.
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"The vote to hold QE at £325bn in June was unexpectedly tight, with four members, including Governor King, voting for an extension. Moreover, within the majority camp there were some members who saw a strong case for further easing, but wanted to see how events unfolded. In particular, members wanted to assess the prospects of support policies other than QE, and some remained concerned about the possible persistence of inflation at above target rates. In our view, neither consideration is likely to stand in the way of policy easing this week," BarCap said.
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Meanwhile, the European Central Bank (ECB) is expected to slash its main refinancing rate to a record-low 0.75% next week, compared with the current 1% level.
"We also look forward to listening to ECB President Mario Draghi at the press conference, at which he will undoubtedly tell Euro area governments that they must get their houses in order, but perhaps also give some clues on any possible further ECB action," Investec said.
On the corporate front, insurance giant Aviva will be holding an investor day, the first it has hosted since parting company with Chief Executive Officer Andrew Moss back in May.
"While there is a risk that a lack of specific detail might underwhelm investors, we believe expectations are already low and incremental disclosures on strategy and capital will be useful as the market ponders the future of the group," suggests Credit Suisse.
"We expect Aviva to summarise the findings of the bottom-up review undertaken by the Executive Chairman and outline plans to improve the composition of group capital, with a view to enhancing existing buffers, lowering volatility and becoming more disciplined in allocating capital across the group. Aside from (expected) confirmation of plans to exit the US, we believe detailed transformational plans are unlikely given the short time elapsed since Andrew Moss's resignation and the need to maintain strategic flexibility for an incoming CEO," the Swiss bank added.
If there are to be any surprises Credit Suisse reckons they could either be "an acceleration of plans to repair capital via a share issue or early success on a business sale."
"On the prospect of a share issue, while we wouldn't want to rule it out, we believe it would be high unlikely given other options available to the group. On a business sale, we believe it is plausible that a result on the Asian operations (e.g., CIMB in Malaysia) could be announced, with the price potentially a source of positive surprise," Credit Suisse said.
Homewares retailer Dunelm reports on trading in the April to June period, the fourth quarter of the group's fiscal year.
Nomura is forecasting an acceleration in like-for-like (LFL) sales growth to 1.2% from +0.6% in the third quarter (Q3).
"Although data suggests trading is likely to have been volatile over the quarter (in part owing to the on-off poor weather), we expect the company to have continued gaining market share and also note that comparables on a 2-year basis do become c.6% easier between 3Q and 4Q, helping to support our view that LFL will have seen a pickup," the Japanese broker said.
Panmure Gordon is even more bullish, predicting LFL sales growth of 2.0% for the fourth quarter. "For the year as a whole, we would not be surprised were Dunelm to exceed its upwardly revised gross margin guidance of +20bps [one-fifth of a percentage point] (cushioning any LFL shortfall)," Panmure Gordon said.
Cyber security firm NCC has been under a cloud since it had to resort to an old information technology system after the costly implementation of a new platform failed, resulting in the company flagging a £6.9m charge - most of it non-cash - in its full year results.
"This [new system] was intended to provide a complete integrated system for all group business processes and NCC has been forced to revert to its existing systems. With an ongoing slew of high profile cyber-attacks, demand for NCC's Assurance Testing business remains strong and that, coupled with a limited supply of services, should ensure pricing and margins going forward," suggests Northland Capital Partners.
Panmure Gordon is expecting engineering support services giant Babcock to issue a confident interim management statement (IMS).
"A confident update following the earnings upgrades delivered at the results in May is expected, with the company particularly upbeat about its prospects in Support Services (37% of 2013E [i.e. projected 2013] revenues). Active areas of bidding activity are expected to be defence property management, training and nuclear decommissioning. It would also be interesting to see whether positive operational gearing is starting to come through in South Africa, which
would provide a decent kicker to its International division (10% of 2013E revenues)," Panmure Gordon said.
"We would anticipate little change in its remaining two divisions in Marine and Defence business. It may be too early to provide an update on any potential acquisitions, but we ... think the company will be looking hard at new opportunities," Panmure Gordon added.
QUARTERLY PAYMENT DATE
GlaxoSmithKline
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
Crude Oil Inventories (US) (15:30)
ECB Interest Rate (EU) (12:45)
Initial Jobless Claims (US) (13:30)
ISM Non-Manufacturing (US) (15:00)
ISM Services (US) (15:00)
MBA Mortgage Applications (US) (12:00)
PMI Construction (GER) (08:55)
GMS
Content Media Corporation, Moneysupermarket.com Group
FINALS
Begbies Traynor Group, NCC Group
AGMS
Babcock International Group, Boussard & Gavaudan Holding Ltd. GBP Shares, Great Portland Estates, Vianet Group
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Decision (12:00)
New Car Registrations (09:30)
FINAL DIVIDEND PAYMENT DATE
Cineworld Group, Quarto Group Inc., Scisys
