The week ahead: First post-Brexit economic data, IMF world outlook


This week will see the first official figures to give an indication about the impact of Brexit on the British economy, while several companies will be issuing results and giving investors updates about the impact of the vote.

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

Monday 18 July

British Land Q1 update

The FTSE 100 real estate investment trust will be an interesting one to watch following the gating of property funds in the aftermath of Brexit.

Graham Spooner, investment research analyst at the Share Centre, says British Land’s shares have been hit hard and now trade at a substantial discount to forecast net asset value.

“The market will be keen to hear the group’s comments on what impact they expect from Brexit, especially on the London market, and what guidance is now for the rest of the year,” he says.

Tuesday 19 July

IMF World Economic Outlook

The IMF will launch its biannual report, which is likely to include analysis of the impact of Brexit. The international financial organisation has previously said that Brexit could threaten London’s role as a global financial centre and could have ripple effects on the global economy.

FCA annual public meeting

The regulator will discuss its annual report for 2015/16 and examine its three operational objectives of “securing an appropriate degree of protection for consumers, protecting and enhancing the integrity of the UK financial system and promoting effective competition in the interests of consumers”.

UK Consumer price inflation, June 2016 – Office for National Statistics

Last month UK inflation stood at 0.3 per cent. Falls in sterling following the UK’s vote to leave the EU is set to push inflation up, although June would be too early to see this come into effect.

Wednesday 20 July

British businesses and Brexit

Greg Clark, who was appointed Secretary of State for Business, Energy and Industrial Strategy during Theresa May’s Cabinet reshuffle last week, will take evidence of business reviews of the EU referendum at this select committee session.

Witnesses will include Open Europe director Raoul Ruparel, TUC deputy general secretary Paul Nowak, CBI deputy director general Josh Hardie, British Chambers of Commerce research director Mike Spicer, and EEF chief economist Lee Hopley.

UK Labour Market Statistics (unemployment statistics)

Unemployment statistics will be released for the three months to the end of May, and will not include any indication of how employers reacted in the aftermath of Brexit. The previous period’s data had been positive, rising by 55,000 and taking the unemployment rate to 5 per cent – the lowest it had been since the period between August and October 2005.

Thursday 21 July

European Central Bank Governing Council – interest rate decision

The ECB will hold its first monetary policy meeting since the UK’s vote to leave the EU. President Mario Draghi is expected to continue the wait-and-see approach since he dropped rates and boosted bond buying in March. A potential crisis brewing in Italian banks is also likely to be discussed.

House of Commons rises for summer recess

As the UK faces economic, political and constitutional uncertainty in the aftermath of Brexit, MPs will head off for their summer recess, returning to the House of Commons on 5 September.

Office for Budget Responsibility – public finance release

Produced jointly by HM Treasury and the ONS, statistics released will cover the public sector’s current budget, net debt, net borrowing and net cash requirements.

UK Retail Sales figures

A survey released by KPMG and the British Retail Consortium earlier this month suggested retail sales fell on a like-for-like basis in the five-week period from 29 May to 5 July. The release will show if the official figures show the same trend.

easyJet Q3 update

Airlines are not expected to be beneficiaries from the UK’s vote to leave the EU and EasyJet came out in support of Remain ahead of the vote. Its stock fell sharply after Brexit and it released a profit warning several days later. Spooner says passenger stats for June were encouraging, but that the market will be keen to hear if expectations for subdued consumer activity this summer have changed.

Unilever Q2 results

In contrast, defensive stock Unilever has been popular in the uncertainty following the EU referendum. Spooner says investors will be interested to see whether the weaker pound has benefited the company and news about plans to cut €1bn from its cost base by 2018.

“At its first quarter update in April the group, which produces a range of brands including Dove, Flora and Ben and Jerry’s, reported healthy sales in emerging markets and investors will be focusing on that area again in this announcement,” Spooner says.