King’s speech sets scene for further easing

SIR Mervyn King’s final inflation report on Wednesday could set the scene for more easing under incoming Bank of England boss Mark Carney.

Analysts expect the report to revise inflation forecasts down, opening more room for money printing in the coming months if the monetary policy committee deems it necessary.

“The Report is almost certain to show inflation remaining above target for the next two years. But a slightly softer near-term profile might calm fears about a rise in inflation expectations,” said Capital Economics. “So, along with the MPC’s more flexible remit, May’s report could be a helpful scene-setter for the arrival of Mark Carney in July and expectations that his arrival will trigger further policy action.”

Meanwhile, the UK’s labour market will be under close scrutiny, with the release on Wednesday of figures revealing the number of jobless claimants and average earnings.

Barclays’ Simon Hayes said: “We expect the labour market report to paint a weak picture in March, with little change in unemployment and more subdued pay growth. We forecast the unemployment rate to be unchanged at 7.9 per cent in March and the claimant count to show a small fall of 3,000 in April. We expect average earnings growth to slow to 0.4 per cent on the year.”

It is a busy week, too, for corporate results, starting today with figures from Blinkx, Northern Investors, Tissue Regenix Group, Diploma, Treatt, Lonmin, Bank of Georgia Holdings, Planet Payment, Johnston Press and Unite Group.

Tomorrow Babcock International Group, Braemar Shipping Services, British Land, DCC, e-Therapeutics, Lombard Risk Management, Nature Group and ICAP will all give final results. Enterprise Inns, Telecom Egypt, APR Energy, Paddy Power, Rathbone Brothers, Balfour Beatty and Capita will give interim figures.

On Wednesday Beximco Pharmaceuticals, Datatec, Land Securities Group and Speedy Hire are set to give end-of-year figures.

Meanwhile easyJet, Compass Group, Centamin, New Europe Property Investments, FBD Holdings, G4S, Ruspetro, Greggs, Hilton Food Group, Ark Therapeutics Group, CLS Holdings and Vitec Group will also update.

Thursday will bring final figures for Invensys, National Grid, Shanks Group, Stobart Group, Vedanta Resources, Talktalk Telecom Group and 3i Group. Euromoney Institutional Investor, Grainger, Marston’s, Optos, Coca-Cola HBC, New World Resources, Aviva, Bovis Homes Group, SIG, Synthomer, Travis Perkins, Subsea, Bumi, Capital & Regional, Rank Group will also update the market.

Premier Farnell reports on Friday.