With the stock market closed for today’s bank holiday, focus turns to the general election on Thursday, the result of which remains on a knife edge.
Analysts at Morgan Stanley said the risk of a minority government has risen due to the main parties’ refusal to entertain a deal with the SNP.
“In that scenario, we’d expect more uncertainty and less fiscal tightening than our central case,” the investment bank said in a note to clients.
“However, even a small shift in the polls in a few key seats could change the outcome.”
Away from politics, Morgan Stanley expects a “robust” reading for the UK’s dominant services sector on Wednesday.
• Bank holiday – The London market is closed, but factory order figures for March are expected from the US. It’s also Star Wars Day, so expect to hear a lot of fans saying: “May the fourth be with you.”
• HSBC – The banking giant, which has sparked doubts over whether it will retain its headquarters in the UK due to “regulatory and structural reforms” stemming from the financial crisis, is due to deliver a first–quarter trading update.
• Greene King – An update on recent trading is also expected from the owner of Belhaven Best and Old Speckled Hen.
• Construction – The latest purchasing managers’ index (PMI) for the sector is predicted to show continued expansion for April, albeit slower than the previous month.
• Sainsbury’s – The UK’s third–largest grocer delivers annual results, which are forecast to show its first drop in profits for a decade as it comes under pressure from price cutting in the sector.
• GlaxoSmithKline – First–quarter numbers are due from the drugs giant, which plans to return £4 billion to shareholders following a complex string of deals with Swiss rival Novartis.
• Services – The growth driver of the UK economy lost momentum in the first quarter, but IHS Global Insight economist Howard Archer believes the latest PMI report will show “reassuring evidence” of robust conditions for April, “although the sector may have slowed slightly compared to March due to increased business uncertainty ahead of the general election”.
• BT – Chief executive Gavin Patterson is expected to report improved annual profits after a busy period that has seen the telecoms group announce the £12.5bn takeover of mobile phone operator EE and secure a new round of Premier League TV rights. City analysts are predicting an 11 per cent rise in pre–tax profits to £3.1bn, buoyed by rising broadband customers.
• General election – Britain goes to the polls to chose the next Westminster government.
• GlaxoSmithKline – In a busy week for the pharmaceuticals group, shareholders gather for its annual meeting in London.
• Trade figures – Official data is tipped to show the UK’s total trade deficit narrowed to £2.2bn in March, having widened to £2.9bn the previous month, from £1.5bn in January. This would bring the Q1 reading to £6bn.
• BG – The oil and gas group, being bought by Shell, reports its first–quarter numbers.