Confidence in UK economy may be short-lived after production data

CONFIDENCE in the UK economy may take a knock this week, with manufacturing data unlikely to match the strong GDP news released last week.

After last week’s upbeat news that the UK has officially exited recession, the manufacturing purchasing managers’ survey (PMI) due on Thursday is expected to show the sector contracted again in October.

Howard Archer at IHS Global Insight said: “It is evident that manufacturers still face a tough environment. Domestic demand for manufactured goods is handicapped by current muted investment intentions, careful consumers and tightening public spending.”

Meanwhile, The Bank of England is expected to report today that mortgage approvals for house purchases rose modestly to 48,000 in September from 47,556 in August and an 18-month low of 44,252 in June. However that is still down 6.1 per cent from 51,093 in September last year.

In corporate news, Barclays is set to kick off the third-quarter banking results season when it updates the market on Wednesday. It is expected to report a profit, while Lloyds, which reports on Thursday, is expected to be in the red because of further provisions needed for PPI claims. RBS, which has just left the asset protection scheme, will give its results on Friday and is expected to have just about broken even in the third quarter.

Other companies expected to report results this week include BAA Airports, Imperial Tobacco, GlaxoSmithKline, Standard Life, BSkyB, Royal Dutch Shell, Legal & General Group, Smith & Nephew, Admiral Group and Henderson Group.