Inflation falling after price wars over Christmas – London week ahead
CONSUMER price inflation figures for December, due out tomorrow, will shine a light on to what extent falling oil prices and intense retail competition have boosted spending power in the UK.
Analysts says the fall in inflation is likely to have been tempered by the fact that there was more retail discounting than usual in November, because of Black Friday.
Barclays economist Fabrice Montagne said: “We have lowered our CPI forecast from 0.9 per cent year on year to 0.6 per cent, with this revision also encapsulating some potential downside risks from food and other prices. The bulk of the fall in petrol prices occurred in the latter half of December, and we therefore suspect that not all of it will be captured in the December RPI data.”
Further details about Christmas spending will be revealed in the British Retail Consortium (BRC) monitor, also out tomorrow.
Howard Archer, of IHS Global Insight, said: “Given the distortions caused to retail sales in December and November by the strong impact of Black Friday in the last week of November, the true measure of how good a Christmas it was for retailers will clearly be determined by the overall sales performance for the two months. Also significant will be how much retailers’ margins were affected overall by Black Friday and other promotions and discounts.”
The corporate week begins today with updates from GVC Holdings and Taylor Wimpey. Tomorrow Ashmore, ASOS, Michael Page, Rathbones, SIG and WM Morrison will give figures, while Cairn Energy is due to give an operational update.
Investors will be watching Morrisons’ figures keenly, after reports that it is likely to have suffered a 3.8 per cent sales fall in the six-week Christmas season, to make it worst-performing supermarket over the festive period.
On Wednesday Barratt Developments, Burberry, Cineworld, Connect Group, Fenner, Games Workshop Group, JP Morgan Chase, Jupiter Fund Management, Ocado, Premier Oil, Shoezone and Tungsten Corporation will all report.
Associated British Foods, Avesco, Booker, Bovis Homes, Clinigen, Experian, Home Retail Group, Mothercare and Tullow Oil will all update the market on Thursday. On Friday moneysupermarket.com, Record and Spectris are due to report, while Acacia Mining will give production results.