Banking and UK monetary policy into City spotlight
The Bank of England’s quarterly inflation report will be even more closely watched than normal on Wednesday as it is likely to contain ideas for a new forward guidance policy.
Governor Mark Carney promised to consider ways of updating the policy after unemployment fell towards the bank’s target much faster than expected. He hinted that a revised version would be less reliant on a single metric.
Meanwhile, the commercial banks will also be in the spotlight as Barclays and Lloyds report annual figures amid a brewing storm surrounding bonuses and rumours that they will seek to sidestep new rules designed to cap payouts.
There is also talk that Barclays plans to hike bonuses, while Lloyds’ chief executive could be in line for a payout.
WEEK AHEAD
Today
• French industrial production – figures are likely to remain in positive territory.
Tomorrow
• Thomas Cook – The group is expected to narrow underlying losses in its financial first quarter, but unrest in Egypt and Thailand may have taken the edge off the holiday firm’s turnaround story.
Wednesday
• Tullow Oil – Tullow is expected to report pre-tax profits of around $1 billion (£600 million), slightly lower than last year.
Thursday
• Lloyds Banking Group – The bank has left little to be revealed in its annual results, having already released a shock update revealing an extra £1.8bn in PPI provisions and guided towards a small profit for the year.
• Rolls-Royce – The engine maker is expected to have powered profits higher, with forecasts suggesting a rise of a quarter, to almost £1.9bn.
Friday
• US industrial production – Growth is likely to have remained weak at around 0.3 per cent.