Mixed blessings in prospect for Carney and Osborne

The latest unemployment figures will be scrutinised for signs that the UK economy is running out of “spare capacity” and putting pressure on the Bank of England to raise rates.

Shibuya crossing in the heart of Tokyo  Japan watchers await results of the countrys latest measures. Picture: Getty

Governor Mark Carney, who shifted his forward guidance on interest rates when unemployment fell to his original 7 per cent threshold much more rapidly than anticipated, is now looking at the country’s capacity to absorb growth without causing inflation.

The Canadian is appearing alongside George Osborne at the Mansion House dinner on Thursday. While the jobs figures released the day before are expected to be positive for the Chancellor, they could prove a headache for Carney.

WEEK AHEAD

Today

• Japan – The Asian nation releases a raft of data that will shed light on the progress of its vast monetary stimulus programme.

Tomorrow

• Retail sales – The first BRC survey for several months which will not be subject to distortions from factors such as the weather and the timing of Easter will finally give a clear picture of how Britain’s high streets are faring.

Wednesday

• Sainsbury’s – Brokers at Barclays and Citigroup both estimate the supermarket will post a 1.1 per cent fall in like–for–like sales figures for the 12 weeks to 7 June.

• Flybe – The market expects the regional airline to bounce back from last year’s loss and report a full–year pre–tax profit of around £6.7 million, on sales of more than £620m.

• Unemployment – Economists say official figures for April will likely show further improvement, with the ILO rate edging down from the 6.8 per cent last reported.

Thursday

• Home Retail Group – Investors will expect to see progress on the digital makeover of Argos when the parent group reports its first–quarter trading. Its other business, Homebase, is tipped to show a solid rise in sales.

• Pets at Home – The company, which floated in March, has said it will post underlying annual earnings of not less than £110.2m, up from £99m last year.

• House prices – The latest Rics survey comes as the debate intensifies over how to deal with London’s red–hot housing market without discouraging buyers elsewhere.

• Mansion House Dinner – Some say Chancellor George Osborne may use his speech to announce greater oversight of the City’s foreign exchange markets.

Friday

• Construction – After two consecutive monthly declines, official figures are likely to show a robust month–on–month increase in output for April, after purchasing managers surveys suggested the sector is in good health.