Promising indicators offset by concerns over export prospects
SIGNS of improving conditions in the manufacturing sector are tipped to be revealed by the CBI tomorrow, although the strong pound continues to weigh on firms’ foreign orders.
Howard Archer, chief UK and European economist at IHS Global Insight, said the export outlook still looks problematic for manufacturers “given the ongoing strength of sterling and heightened concern that global growth could be held back” as the economy cools in China.
Tomorrow also brings the latest public sector borrowing figures for August, and Archer believes they will bring “encouraging news” for Chancellor George Osborne, who will be hoping the economy can “kick on and not be hampered by global growth being held back by a marked slowdown in China and emerging markets”.
Today
l Finsbury Food – The owner of Scottish cakes producer Lightbody is due to post its annual results, having told investors recently that revenues for the 12 months to 27 June jumped 48.5 per cent to £256.2 million, putting the Aim–quoted group on track to beat its profit forecasts.
Tomorrow
l AG Barr – Analysts at Investec predict the Irn–bru maker will post a fall in pre–tax profits to about £17m for the first half, from £19m a year ago. The Cumbernauld-based firm has already said that poor weather had dampened trading, with sales for the six months to 27 July expected to fall about 5 per cent compared with the same period last year. l AA – Half–year results are expected to reveal a further decline in profits as the motoring organisation continues to shed personal members, though business customer numbers are growing. Analysts at Morgan Stanley forecast a 2.5 per cent fall in underlying earnings to £207m, on revenues 0.7 per cent lower at £488m. l Public finances – Official figures are tipped to show that public sector net borrowing, excluding the distorting effects of bank bailouts, narrowed to £9.2 billion in August, from £10.4bn a year earlier, which could help Chancellor George Osborne beat his target of £69.5bn for the financial year.
Wednesday
l United Utilities – The water firm delivers its first trading update since hundreds of thousands of customers in Lancashire were affected by the discovery of a parasitic bug in their supplies. Analysts at Bernstein expect this to result in a £21m compensation bill.
Thursday
l Thomas Cook – The tour operator is expected to have benefited from holidaymakers getting away from the UK’S wet August when it posts a trading update on Thursday. Easyjet and Ryanair both saw an uplift in passengers last month as consumers took advantage of the strong pound to escape the unseasonal weather.