The Week Ahead: UK unemployment and CBI on financial services


This week sees an update from M&S, the Fed releasing its Beige Book, plus UK figures for unemployment and wages, plus the CBI releases its quarterly update for financial services.

Fund Strategy looks at some key events shaping the week and what to expect.

Monday 10 July

  • CBI Quarterly Financial Services Survey

Last week, the UK’s main business lobby demanded that the country remain in the single market and customs union for the foreseeable future as it warns members are already shelving investment decisions and struggling to recruit EU staff.

In the latest financial services survey, conducted with PwC, we will find out if the CBI’s Brexit concerns have hit the City.

Tuesday 11 July

  • M&S Q1 trading update

The market will be keen to hear how the extensive restructuring programme is going and looking for early guidance on full-year earnings and sales, says Graham Spooner, investment research analyst at The Share Centre.

“There’s been a lot of focus on the retail sector in recent times as inflation has risen and there have been signs of a fall in consumer sentiment. 

“A survey by The Times in May suggested many retail groups had fairly low expectations for the current year. M&S’ full-year figures in the same month showed robust sales on the food side and some positive signs in the clothing and homeware business.”

Wednesday 12 July

  • Council of Mortgage Lenders – monthly lending trends
  • US Fed releases Beige Book
  • UK Labour market, three months to May – Office for National Statistics

Last month, UK unemployment fell to 4.6 per cent, the joint lowest level since 1975. However, the report also revealed that wages rose by just 1.7 per cent excluding bonuses, meaning real wages fell by 0.6 per cent.

Given UK inflation rose to 2.9 per cent in May, it is likely that real wages fell at an even faster rate in May, says Spooner.

Thursday 13 July

  • Bank of England: Bank Liabilities Survey & Credit Conditions Survey + Review

The survey, which is one of a number of inputs into the Credit Conditions Review, covers developments in the volume and price of bank funding; developments in the loss-absorbing capacity of banks as determined by their capital positions; and developments in the internal price charged to business units within individual banks to fund the flow of new loans, sometimes referred to as the ‘transfer price’.

  • Residential Market Survey, June – Royal Institute of Chartered Surveyors

The Residential Market Survey pointed a further slowdown in May, with the headline index falling from plus 22 to plus 17.

The UK housing market continues to be haunted by poor demand and supply, says Spooner, but with real wages falling and the Bank of England apparently contemplating a hike in interest rates, can house prices continue to rise for much longer?

Friday 14 July

  • US consumer prices, June – Bureau of Labor Statistics

US inflation seems to be on a downward trajectory, says Spooner.

The headline rate fell to 1.9 per cent, from 2.2 per cent the month before. If this continues in June, Spooner questions whether it will persuade the Fed to drop its plans to gradually increase US interest rates.