US shutdown and UK retail set to capture headlines

ECONOMICS will dominate the headlines this week, with the Bank of England’s monetary policy committee’s usual two-day meeting curtailed to just one day so that central bankers can hop across the Pond for the annual gatherings in the United States of the International Monetary Fund and the World Bank.

Greggs bosses will this week update the City on plans to turn the bakery chain around after it issued two profit warnings earlier this year. Picture: Robert Perry

Warnings of a fresh recession in the world’s biggest economy caused by the shut-down of the US federal government threatens to overshadow the meetings, with G20 finance ministers and central bankers also congregating this week.

Back at home, retailers will shine a light on consumer spending as analysts try to determine whether the UK’s nascent economic recovery is filtering through to the high street.

WEEK AHEAD

Today

• Waterman – The engineering and environment consultancy firm, which has worked on projects including the refurbishment of the Turnberry Hotel in Ayrshire, posts its full–year results. Activist investor Peter Gyllenhammar has built up a 29 per cent stake in the business.

Tomorrow

• Royal Mail – Investors have until today to apply for shares in the national postal system, with shares being offered at between 260p and 330p.

• Robert Walters – The City will be looking for more positive signs from the recruitment firm when it delivers its latest trading update. Sebastien Jantet, an analyst at Investec Securities, noted: “Whilst Robert Walter’s interim results for the six months to June were in line with expectations, the outlook was a tad more positive, with the momentum seen in the second quarter so far continuing into the third.”

Wednesday

• Bank of England – The monetary policy committee will break with tradition and hold only a day–long meeting to set interest rates, although economists expect the base rate to be held at its record low of 0.5 per cent.

• N Brown – The online fashion retailer and catalogue firm, which owns brands including Figleaves and High & Mighty, is expected to report rising half–year profits following a rise in customer numbers and a pick–up in its womenswear business.

• Greggs – Chief executive Roger Whiteside will update the City on his turnaround plans at the bakery chain following two profit warnings so far this year as hot weather took a bite out of sales.

• Marston’s – The brewery and pub operator, which is in the midst of an expansion push into Scotland, is predicted to unveil a strong end to its year, with its premium bar brands, such as Pitcher & Piano and Revere, thought to have enjoyed a boost from the summer heatwave.

Thursday

• Hays – RBC Capital Markets analyst David Greenall remains “neutral” on the recruitment firm, despite the stock rallying thanks to the improved economic outlook in the UK. Greenall is concerned that the Australian and German markets may still disappoint over the coming six months, adding: “Our view is that it is still too early to buy Hays.”

• G20 – Finance ministers and central bankers will gather in Washington, DC for a two–day meeting. Items on the agenda include reform of international financial architecture.

Friday

• Royal Mail – Conditional trading begins in shares in the postal service, with full trading beginning on 15 October.

• IMF – The International Monetary Fund and the World Bank hold their annual two–day meeting in Washington, DC. In a speech last week, IMF managing director Christine Lagarde highlighted the need for closer international co–operation on reforming the global financial system.

• United States – The University of Michigan’s consumer confidence survey will give an indication of how the federal government shutdown has hit consumers. Markit economist Mark Wingham said: “Consumer sentiment is likely to have taken a hit from the shutdown, especially due to the uncertainty surrounding wages.”