Wednesday preview: Inflation trends, Old Mutual

published 7 August 2012

The Bank of England's guide to the future for UK inflation trends is due for release on Wednesday, with most economists expecting Britain's central bank to predict the consumer prices index (CPI) inflation rate returning to its 2pc target level sooner rather than later.

The last report from the Bank of England (BoE) in May suggested CPI would drop to target around the beginning of 2013. In June the figure was 2.4%.

The price of oil will be one major factor in the forecast, with average prices having slumped from $120 per barrel to around $105 in the face of weakening growth in China and the dire economic picture in Europe.

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British retailers have also been making fierce price cuts in a battle to win market share, and this should also filter through into the CPI number.

There are dangerous variables that the BoE has to contend with,however; a current drought in the US may push up food prices, while if the Eurozone crisis worsens the pound may weaken against the dollar and the renminbi, pushing up the cost of a host of imported goods.

In what is a big week for insurance company results, Old Mutual keeps the trend going with interim figures.

Having outlined its three year plan in 2010 to simplify the business, Old Mutual's progress has been a bit mixed, according to Nic Clarke at broker Charles Stanley.

"The US life and the Nordic businesses have been sold, the sale of Nedbank fell through and Old Mutual has managed to sell off parts of its USAM business. Ironically, it was Nedbank that boosted the results in 2011 and the USAM business, earmarked for an IPO [flotation], which has experienced a turnaround in fund flows that led to a better than expected overall performance in Q1 [first quarter] 2012," Clarke notes.

"Although Q1 sales were better than expected, sales growth in emerging markets only partly offset the downturn in European sales. Wealth Management sales were down 21% due to market volatility taking its toll on investor confidence," Clarke added.

INTERIMS

Cobham, Old Mutual, Stada Arzneimittel AG

INTERIM DIVIDEND PAYMENT DATE

CQS Rig Finance Fund Ltd., Safestore Holdings

INTERIM EX-DIVIDEND DATE

4Imprint Group, Avon Rubber, Dialight, Edinburgh UK Tracker Trust, Foreign and Colonial Inv Trust, GKN, Hiscox Ltd., IDOX, Inchcape, Jupiter Fund Management , Law Debenture Corp., LSL Property Services, Maven Income & Growth 3 VCT, Maven Income and Growth VCT 5, Millennium & Copthorne Hotels, Octopus Second AIM VCT, Reckitt Benckiser Group, Reed Elsevier, Rexam, Spirent Communications, St. Modwen Properties, Standard Chartered

QUARTERLY EX-DIVIDEND DATE

Barclays, BP, City of London Inv Trust, GlaxoSmithKline, IBM Corp., JPMorgan Claverhouse Inv Trust, Picton Property Income Ltd, Royal Dutch Shell 'A', Royal Dutch Shell 'B', Unilever

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Balance of Trade (GER) (07:00)

Crude Oil Inventories (US) (15:30)

Current Account (GER) (07:00)

Industrial Production (GER) (11:00)

MBA Mortgage Applications (US) (12:00)

Productivity (US) (13:30)

Retail Price Index (GER) (07:00)

Yamana Gold Inc.

GMS

Ferrum Crescent Ltd NPV (DI)

FINALS

eXpansys

AGMS

Renewable Energy Holdings

UK ECONOMIC ANNOUNCEMENTS

BoE Inflation Report (09:30)

FINAL DIVIDEND PAYMENT DATE

IBIS Media VCT 1, Ventus 2 VCT, Ventus 2 VCT 'C' Shares, Ventus VCT, Ventus VCT 'C' Shares

FINAL EX-DIVIDEND DATE

Atlantis Japan Growth Fund Ltd., BT Group, Greene King, JPMorgan Brazil Inv Trust , Pennon Group, QinetiQ Group, RPC Group, SABMiller, Solid State, Synergy Health, Victoria

Canaccord Financial Inc.