Tuesday preview: UK to get monthly inflation check-up, Ashtead reports

UK inflation will be under the spotlight on Tuesday as one half of the vice grip that is squeezing consumers and slowing down spending in various areas of the economy, with updates later in the week on employment and wages ahead of the Bank of England rate announcement on Thursday.

The consumer price index is expected to rise to 2.8% in August from 2.6% in the two prior months, with a month-on-month rise of 0.5% after the unexpected 0.1% fall in July.

Core CPI inflation is seen easing to 2.3% from 2.4%, according to the consensus.

However, Credit Suisse, as one example, predicted headline CPI will have rises to 2.7% but that core inflation will also increase to 2.5% in August.

RBC Capital was more in line with consensus, forecasting CPI inflation will hit 2.8%.

"This reflects the on-going impact of exchange rate depreciation associated with the EU referendum feeding through to higher import prices. We continue to see the peak for CPI inflation at 3.1% y/y in October this year before falling back gradually in 2018."

For RPI inflation, RBC also sees a 0.2 percentage point increase this month, to 3.8% on the year, while for CPIH an increase of just 0.1 point to 2.7% is anticipated, given that this more domestically focused index is less exposed to
exchange rate pass-through effects.

In company news, Ashtead is due to provide a first-quarter update alongside its annual shareholder meeting.

A strong start to the 2018 financial year was expected by UBS, with potential for some upside if the company discloses expected impact of US hurricane recovery work.

"However, we believe construction markets are currently slowing and competition remains intense – we may be at the peak of performance."

Deutsche Bank also forecast the quarter to end-July will have been a good one, with continued growth seen for Sunbelt's fleet on rent up 14% and Sunbelt yields at -1.2% versus -3% in the fourth quarter. Group EBITDA of £421m and EPS of 29.0p is expected.

"We expect that Harvey impacted areas might see elevated equipment rental demand in fiscal Q2/Q3-18E. We think Ashtead has fairly high exposure and market share in Texas."

Tuesday, 12 September

FINALS
Vernalis plc, TyraTech Inc. (DI / REGS), Murgitroyd Group, InnovaDerma

INTERIMS
TP Group, Hilton Food Group, Manx Telecom, Smart Metering Systems, TyraTech Inc. (DI / REGS), JD Sports Fashion, ADES International Holding (DI)
Hydrogen Group, SafeCharge International Group Limited (DI), Tasty, Flowtech Fluidpower, Midwich Group, STM Group, Goals Soccer Centres

Q1
Ashtead Group

AGMs
Daejan Holdings, Bushveld Minerals Limited, Van Elle Holdings, Mulberry Group, Emmerson, Oxford Instruments, Ashtead Group, Limitless Earth, EF Realisation Company Limited (NPV), Aew UK Reit, Liontrust Asset Management, Supergroup

FINAL DIVIDEND PAYMENT DATE
Yu Group

UK ECONOMIC ANNOUNCEMENTS
Producer price index (09:30)
Retail price index (09:30)
CPI (09:30)