Thursday preview: Bank of England to keep rates unchanged amid Brexit fears

The Bank of England is expected to keep interest rates unchanged on Thursday amid uncertainty surrounding next week’s European Union referendum.

With the 23 June EU referendum just around the corner, economists see the central bank holding interest rates at 0.50% and the asset purchase programme at £375bn.

Stubbornly low inflation, a slowing economy and weak wage growth will also be taken into consideration in the latest policy decision.

Official data on Wednesday showed inflation remained well below the Bank’s 2% target in May, with the consumer price index flat at 0.3% on an annual basis.

UK jobs data on Thursday also revealed that average weekly wage growth remained unchanged at 2.0% in the three months to April - even as the unemployment rate unexpectedly fell to 5.0% from 5.1% and employment rose 55,000 to a record 31.6m.

Howard Archer, chief UK and European economist at IHS, said the gap between earnings growth and consumer price inflation is down from peak levels seen around August and September, thereby diluted consumers’ purchasing power.

“Earnings growth at 2.0% in the three months to April is still below the level (at least 3.0%) that the Bank of England believes is consistently needed to get consumer price inflation up towards its 2.0% target level,” he said.

Archer believes an interest rate hike is unlikely to come until May 2017, on the assumption that Britain votes to remain in the EU.

“And if there is a vote to leave the EU, the Bank of England’s most likely next move will be to cut interest rates from 0.50% to 0.25%,” he said.

Thursday 16 June

INTERIMS
CareTech Holding, Safestore Holdings

INTERIM DIVIDEND PAYMENT DATE
Aberdeen Asset Management

INTERIM EX-DIVIDEND DATE
Alternative Networks, Majedie Investments, Scottish Inv Trust, Watkin Jones

QUARTERLY EX-DIVIDEND DATE
Real Estate Credit Investments PCC Ltd Pref Shs , TwentyFour Select Monthly Income Fund Limited

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Price Index (EU) (10:00)
Consumer Price Index (US) (13:30)
Current Account (US) (13:30)
Philadelphia Fed Index (US) (13:30)

GMS
Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S)

FINALS
Atkins (WS), Charles Stanley Group, Consort Medical, Darty, Purplebricks Group, Redcentric

SPECIAL EX-DIVIDEND PAYMENT DATE
Northern 3 VCT, Safestyle UK

EGMS
Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S)

AGMS
Blinkx, Blur Group , Constellation Healthcare Technologies, Inc (DI/REG S), Evraz, Himalayan Fund NV, Nokia OYJ, Puricore, Serabi Gold

UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Decision (12:00)
BoE Interest Rate Minutes (12:00)
Retail Sales (09:30)

FINAL DIVIDEND PAYMENT DATE
Taptica International (DI)

FINAL EX-DIVIDEND DATE
3i Group, Alliance Pharma, Amati Vct 2, Big Yellow Group, Electrocomponents, First Derivatives, Harvey Nash Group, Indivior, Intermediate Capital Group, London & Associated Properties, Maven Income & Growth VCT, Mears Group, Mediclinic International , New Century AIM VCT 2, Northern 3 VCT, ProVen Growth & Income VCT, ProVen VCT, Restaurant Group, S&U, Safestyle UK , Scisys, Severn Trent, Sirius Real Estate Ltd., Stobart Group Ltd., Telford Homes, Templeton Emerging Markets Inv Trust, Value and Income Trust, Vianet Group