Thursday preview: BoE seen sitting tight, after Next and ONS retail numbers

Thursday's monetary policy announcement from the Bank of England is expected to see the rate-setting committee sit tight, with odds against an interest rate move increasing after relatively robust unemployment data was released.

The policy decision and meeting minutes will be released at midday, with governor Mark Carney and some colleagues speaking to the press a short while afterwards.

With unemployment remaining at a post-crisis low of 4.9% for another month, as the Office for National Statistics (ONS) confirmed on Wednesday, economists felt the Monetary Policy Committee is even more likely to stand pat.

"Nonetheless, given the signs that GDP growth has ground to a halt in the third quarter, a further loosening in monetary policy is probably still on the cards later this year," said economist Ruth Gregory at Capital Economics. "Our expectation is that Bank Rate will be cut to 0.10% in November."

Howard Archer at IHS Markit agreed a September rate cut was unlikely and that November could see the move made, adding: "We believe the MPC will hold off in November from any more quantitative easing or corporate bond purchases.

"However, there is clearly an increased chance that the Bank of England will sit tight on interest rates in November given the current resilience of the economy, especially as the MPC may well want to see what Chancellor Philip Hammond comes up with in the Autumn Statement," Archer added.

Earlier on Thursday, at 0900 BST, retail sales are due from the ONS, with the Carney his deputy governors able to see the data a day before they are released before making policy decisions.

Retail sales are expected to have been fallen back by around 0.8% in August after a strong 1.5% increase in July.

Survey evidence from the BRC indicates that retail sales suffered in August from the fine weather deterring people from shopping and preferring to partake in leisure and outside activities.

Retail reports

Ahead of the national retail data, some big retailers are due to post much anticipated half-year reports, notably retail investor favourite Next.

Analysts at UBS forecast a profit before tax of £340m, 2% down on last year after a first half update showed total sales for the 26 weeks to 30 July were down -0.3%.

UBS expects earnings per share to be up 2%, reflecting buybacks over the last 12 months, against recent company guidance for full year growth in earnings per share to be between -2.5% to +6.3%.

UBS said it expects a slightly lower rate of profit decline in the second half.

Fellow FTSE 100 member Morrison Supermarkets also is expected to deliver like-for-like (LFL) sales growth of 0.7%, having returned to LFL sales growth at the end of last year and continuing in the first quarter.

Consensus profit before tax expected to improve to £150m from the £117m last year.

Deutsche Bank, which forecasts a higher 1.1% LFL rate and £144m PBT, said it did not think the results would be a negative event but said, with the shares up from under 150p to above 190p since the start of the year, "we think valuation is stretched" based on a forward p/e ratio of 20 of its earnings.

Thursday September 15

UK ECONOMIC ANNOUNCEMENTS

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

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Balance of Trade (EU) (10:00)
Business Inventories (US) (15:00)
Capacity Utilisation (US) (14:15)
Consumer Price Index (EU) (10:00)
Continuing Claims (US) (13:30)
Crude Oil Inventories (US) (15:30)
Current Account (US) (13:30)
Industrial Production (US) (14:15)
Initial Jobless Claims (US) (13:30)
Philadelphia Fed Index (US) (13:30)
Producer Price Index (US) (13:30)
Retail Sales (US) (13:30)
Retail Sales Less Autos (US) (13:30)

FINALS

Ricardo

INTERIMS

Be Heard Group, Booker Group, Fairpoint Group, IndigoVision Group, Next, Morrison (Wm) Supermarkets, Premier Farnell, Proteome Sciences, Safestyle UK

TRADING STATEMENT

Purplebricks

SPECIAL EX-DIVIDEND PAYMENT DATE

Hargreaves Lansdown, Taptica International (DI)

AGMS

Ashley House, Ensor Holdings, Livermore Investments Group Ltd., Mobeus Income & Growth 2 Vct, Purplebricks Group, Terra Catalyst Fund (DI)

FINAL EX-DIVIDEND DATE

Dart Group, Hargreaves Lansdown, Renishaw, Sophos Group , South32 Limited (DI) , Trifast, UniVision Engineering Ltd.

INTERIM DIVIDEND PAYMENT DATE

4Imprint Group, Quartix Holdings

INTERIM EX-DIVIDEND DATE

1pm, Arrow Global Group, BBA Aviation, Belvoir Lettings, Centaur Media, Communisis, Computacenter, Costain Group, Derwent London, Fyffes, Highcroft Investment, Holders Technology, Inmarsat, Interserve, Molins, Neptune-Calculus Income & Growth VCT, Octopus AIM VCT 2, Plus500 Ltd (DI), Restaurant Group, RPS Group, Sanne Group, Total Produce, Worldpay Group (WI), Zotefoams

QUARTERLY PAYMENT DATE

Canadian General Investments Ltd.

QUARTERLY EX-DIVIDEND DATE

Assura , BlackRock Income Strategies Trust , XP Power Ltd. (DI)