Good morning and welcome back to the Week Ahead.
The new government has promised to put growth at the heart of its agenda. Hopes are high that Chancellor Rachel Reeves will also take steps to unclog the UK planning system and boost new home construction. We’re planning an in-depth look at UK housebuilders in the coming weeks – keep an eye out.
Last week’s news that the UK economy returned to growth in May with a 0.4% rise in GDP is obviously unrelated to anything Labour has done, but seems positive nevertheless.
A number of commentators are suggesting the drag from inflation and higher interest rates is now starting to drop out of the numbers. However, recent company trading reports suggest real-world conditions remain more mixed both at home and overseas.
Recruiters Hays and PageGroup have both recently reported a >15% drop in UK fee income, with similar declines in overseas markets. Confidence is said to be low among both candidates and clients, suggesting that many businesses are continuing to face uncertain outlooks.
An update from rival Robert Walters this week seems likely to confirm this trend, but Walters’ business is particularly weighted to Asia Pacific, so look out for comments on this region.
Meanwhile, updates from retailers including Dunelm, Sosandar and Burberry may provide additional insight into consumer confidence.
Confidence among retail investors also still seems mixed, at best, based on updates from various fund managers covered in the SCVR last week.
In contrast, investment platforms Hargreaves Lansdown, AJ Bell and IntegraFin all reported positive net inflows in their most recent results. Quarterly updates are due from all three of these firms this week, so it will be interesting to see if their record of inflows is maintained.
For shareholders in Hargreaves Lansdown, trading performance may be irrelevant if a proposed 1,140p bid is confirmed. A consortium led by private equity group CVC is currently undertaking due diligence. The bidders are required to make an offer or withdraw by 5pm on Friday 19 July, unless Hargreaves extends this deadline.
Over in the US, bank earnings season is underway. Updates are also due from Netflix and energy services group Schlumberger. There’s plenty to look forward to.
Companies reporting this week
Day | UK companies reporting | US earnings |
Monday - 15 July | Me… |
