The housing market recovery will be in sharp focus this week, with a raft of data laying bare the Bank of England’s dilemma over rising prices in the south of England.
With prices elsewhere still struggling to gain traction and the economy needing all the help it can get to return to a less debt-dependent state, evidence of overheating in London is an unwelcome reminder the eventual need to raise interest rates.
Economist Philip Shaw, at Investec, said the latest figures may let policymakers off the hook.
“Evidence over the past month or two opens up a possibility that the housing market has begun to cool in any case,” he said.
• BAA – Mortgage approval figures kick off a busy week for housing data, with any rise in lending likely to fuel calls for an interest rate rise.
• Aveva – The software and design firm reports full year results that are likely to show a high single-digit uptick in profits, to more than £76 million.
• Telford Homes – As a London-focused builder, Telford’s full year results promise to reflect the benefits of a rapidly recovering market.
• Iomart – The Glasgow-based cloud computing specialist recently guided the City’s full year earnings expectations higher, to around £14.5m, up almost £4m on the previous year thanks to acquisitions and business wins.
• Help to Buy – The Treasury publishes its first statistical release on Help to Buy 2 – the mortgage guarantee scheme – amid talk that the Bank of England may try to rein in the programme.
• Severn Trent – Investors are hoping for dividend growth of 6 per cent, while the City will be interested to see how political pressures affect pricing.
• Kingfisher – The B&Q owner’s trading update is likely to be a tale of two halves, as its UK operations benefit from the retail recovery but its French business continues to struggle amid tougher economic conditions.
• Tate & Lyle – Aggressive pricing by Chinese rivals are likely to give the sugar firm’s results a bitter taste, with analysts at Charles Stanley predicting that full-year profits will be a shade lower than the £358m it made in the 12 months to March 2013.
• Consumer confidence – Economists say the monthly GfK survey may have eased back as the public takes stock of recent improvements and considers the political uncertainty ahead.