London Report: UK data to show economy is on path to recovery

ECONOMIC indicators out this week are expected to show the UK recovery continuing at a healthy pace.

PMI survey data for services, manufacturing and construction are likely to show strong growth throughout May.

Blerina Uruci, of Barclays, expects services PMI to hit 60 in May, up from 58.7 and well above the 50 figure which shows expansion.

She said: “We expect the headline index to rise further in May, consistent with significantly above-average expansion in activity. The services PMI survey has been strong across the board, indicating the pace of expansion is likely to be sustained.

“In general, the PMI data outturn and our forecast for the May data would be consistent with the economy continuing to grow at a healthy pace in Q2 2014.”

In other economic news, the Monetary Policy Committee will announce its latest decision on rates on Thursday. Economists expect no change until later in the year.

Bank of England figures for mortgage approvals, out today, are likely to show a decrease in the number of home loans from the previous month, as tighter mortgage rules take effect.

However house prices are continuing to rise, as the Nationwide housing index is set to show tomorrow.

Howard Archer, of IHS Global Insight, said: “We expect the Nationwide to report that house prices rose by 0.6 per cent month-on-month in May, which would keep the year-on-year increase up at 10.9 per cent, which is the strongest rate since June 2007.”

The corporate calendar begins today with an interim report from RWS Holdings.

Tomorrow Establishment Investment Trust, LondonMetric Property, Pennon Group and Severfield will all give end-of-year figures while Wolseley will update the market.

On Wednesday Advanced Computer Software Group, Findel, RPC Group, Synergy Health and Workspace Group will give final numbers, while Alternative Networks and Tesco will also report.

Thursday’s full-year results are due from Acal, AO World, Johnson Matthey, VP and Wincanton while Bellway will also give a trading update.

On Friday Fuller Smith & Turner and KCOM Group will give final figures and Scottish Investment Trust will deliver an interim report.