More interest rate speculation on the cards

Minutes from the Bank of England’s latest monetary policy committee meeting will be pored over this week for further hints at when interest rates may start to rise.

The Bank of Englands latest monetary policy meeting takes place later this week. Picture: AFP/Getty

Governor Mark Carney has already raised expectations that borrowing costs could start to increase before the end of the year, with some observers predicting a move could come in November, coinciding with publication of the central bank’s quarterly inflation report.

On the corporate front, this week also brings trading updates from B&Q parent Kingfisher, Royal Mail and mobile phone giant Vodafone, which is expected to post its fourth quarter of growth in a row.

WEEK AHEAD

Today

• British Land – The property investor, owner of London’s Leadenhall Building – also known as the Cheesegrater – is due to deliver an update on trading for the first quarter.

Tomorrow

• Royal Mail – With rivals Whistl and City Link folding in recent months, the former state–owned postal service is expected to report steady first–quarter progress. Last month the UK government sold half of its remaining stake in Royal Mail, raising £750 million to help pay down national debt.

• Public finances – Economists predict that public sector net borrowing, excluding the distorting effects of bank bailouts, will have narrowed to £8.5 billion in June, from £10.4bn a year ago, thanks to a marked rise in income tax receipts.

• AO World – Shareholders will gather for the online appliances retailer’s annual meeting. Last month the Bolton–based firm, which floated a year ago, posted a 23.8 per cent jump in revenues to £476.7m for the year to the end of March, although it made an operating loss of £2.2m on the back of investment in European start–up operations.

Wednesday

• MPC – Minutes from the Bank of England’s rate–setting committee are expected to show members were again unanimous in voting to keep interest rates on hold at their record low of 0.5 per cent. However, Howard Archer, chief UK and European economist at IHS Global Insight, said that the report would be “closely scanned to try to gauge just how many of the nine MPC members are close to voting for an interest rate hike”.

Thursday

• Kingfisher – The home improvements group is tipped to report solid second–quarter trading as it pushes on with its plans to turn around the business, which said in March that as many as 60 B&Q stores would close over the next two years, affecting about 3,000 jobs in the UK and Ireland. Brokers at Jefferies expect the DIY chain to report like–for–like sales up 2.2 per cent in the ten weeks to 23 July 23, compared with a 1.1 per cent fall in the previous quarter.

• Retail sales – Official data from the Office for National Statistics is forecast to reveal a 0.4 per cent increase in retail sales volumes for June compared with the previous month, delivering a year–on–year increase of 4.8 per cent.

• Royal Mail – In a busy week for the former state monopoly, shareholders meet for its AGM.

Friday

• Vodafone – The mobile phone giant is expected to post its fourth quarter of growth in a row as its revamp begins to take hold. The City expects the group, which has more than 20 million 4G customers in 18 markets, to post a 0.5 per cent rise in service revenues in the three months to the end of June, with broker JP Morgan Cazenove saying the British market has “good momentum”.