Morrisons set to reveal Christmas gift of 7% sales surge

AWAY from reports of more bumper profits at US banks, a clutch of UK economic data and more groups reporting on their Christmas trading should give the markets direction this week.

Morrisons is expected to emerge as the Christmas winner among the UK's "big four" supermarkets when it posts sales figures on Thursday.

Analysts at Evolution Securities expect Morrisons – which has lost its highly regarded chief executive Marc Bolland to Marks & Spencer – to post like-for-like sales growth of up to 7 per cent for the festive period.

Morrisons would then surpass a resurgent Tesco's 4.9 per cent same-store growth this week and the 4.2 per cent from Sainsbury's. Asda has yet to report.

Evolution's Dave McCarthy said the anticipated strong trading from the UK's fourth-biggest supermarket would be "remarkable" on the back of strong festive trading in the two previous years as the chain reaps the benefits of Bolland's turnaround strategy.

But McCarthy pushed for a "rapid conclusion" to the hunt for a successor, adding: "The big issue is who will be the new CEO? Until this is resolved, the shares will be held back by uncertainty."

Bookmaker William Hill reports fourth-quarter figures on Wednesday, amid expectations of comments on the impact of the pre-Christmas snow and ice.

Analysts at Numis Securities predict the number of horse races last month fell by 5 per cent because of the weather, with more disruption since then.

But they believe William Hill will be generally upbeat, after a strong third quarter when its betting shop business weathered a run of punter-friendly football results.

No frills airline EasyJet reports on trading on Thursday after snow and ice played havoc with UK transport.

EasyJet has not been alone in being affected, but the group is expected to have been boosted by the woes at British Airways over the past month, with the pre-Christmas strike threat expected to have boosted EasyJet's business.

Analysts at Numis said EasyJet was unlikely to change guidance since the last update only six weeks earlier, but was expected to be "upbeat about its revenue performance".

Shareholders in Jessops – the UK's biggest camera retailer – will vote on Thursday on a rescue deal that would save 2,000 jobs, but virtually wipe out their holding in the group.

Struggling Jessops is laden with debt and said it will need to be wound up if the survival plan is not passed.

But the deal involves selling its assets to a new company owned 47 per cent by HSBC, 33 per cent by pension trustees, and 20 per cent by an employee trust. Just 100,000 will be left for investors in the old company.

Retail sales figures on Friday are likely to be the highlight of a busy week for economic data as markets look for the latest signs of recovery on the high street in pre-Christmas trading.

Investec chief economist Philip Shaw – who predicts a 1.1 per cent month-on-month rise in sales volumes – said: "December trading seems to have been good on the figures so far."

Tomorrow's inflation data will also be of interest with the Bank of England's consumer prices index (CPI) set to head above its 2 per cent target.

Shaw, who expects the CPI to hit 2.7 per cent for the month, added that factors such as higher petrol prices and unchanged VAT in December – compared with the beginning of the temporary cut 12 months earlier – would add to inflationary pressure.

Wednesday's minutes of the Bank of England's January policy meeting are likely to contain few surprises after the no-change decision earlier this month.

Public borrowing figures for December on Thursday are likely to bring more bad news after November's figure hit 20.3 billion, an all-time high for a single month. Net borrowing for the eight months of the financial year so far stands at 106.4bn and is expected to hit 178bn for the year as a whole.