London Report: Carney’s first inflation report in the spotlight

NEW Bank of England governor Mark Carney will take centre stage this week as he announces the latest Quarterly Inflation Report, plus plans to adopt forward guidance on interest rates for the first time.

Forward guidance would give the bank’s Monetary Policy Committee (MPC) a third method of influencing the economy, alongside interest rates and supporting the economy through the asset purchase programme of quantitative easing (QE).

Howard Archer, of IHS Global Insight, expects the governor to indicate that interest rates will stay at 0.5 per cent until at least late 2015.

He said: “There seems little doubt that Carney and his MPC colleagues will want to ram home the message to businesses, consumers and the markets that any tightening of monetary policy is a very long way off, notwithstanding the recent signs of improvement in the economy. To this end, we are convinced that the Bank of England will formally adopt a policy of forward guidance on interest rates.”

In other economic news, the week starts with UK services data for July, plus news from the BRC Retail Sales Monitor. Tomorrow’s figures include industrial and manufacturing production data from June and new car registration figures from last month.

On Wednesday the Bank of England inflation report will be announced, plus Rics housing price data from last month.

Finally on Friday, trade balance figures from June are expected.

The corporate calendar includes financial reports including Standard Chartered, Standard Life, Schroders, Legal & General and Aviva.

Powerflute Oyj, Alent, HSBC Holdings, Pennant International Group and GW Pharmaceuticals will all update the market today.

AL Noor Hospitals Group, BBA Aviation, Clarke, Dragon Oil, esure Group, Heavitree Brewery, Hill & Smith Holdings, Legal & General, Meggitt, New Europe Property Investments, SDL, Share, Standard Chartered, Zotefoams, Domino’s Pizza Group, InterContinental Hotels Group, Greggs, BBA Aviation, Canaccord Financial and SABMiller will report tomorrow.

On Wednesday NWF Group, Novae Group, Old Mutual, Quarto Group, Cyprotex, Eurasian Natural Resources, United Drug, TUI Travel and Quintain Estates and Development will give figures.

Hillshire Brands Company, Aviva, Avocet Mining, Coca-Cola HBC, Telecom Industries, Henderson Group, Huntsworth, Ladbrokes, Puricore, Rio Tinto, Schroders, Spirax-Sarco Engineering, Standard Life, Stanley Gibbons Group, Rio Tinto, Savills Grainger, Pennon Group, Bellway and Affinia Group Holding deliver updates on Thursday while AFI Development and Catlin Group report on Friday.