Figures on employment and wage trends published on Tuesday will inform the Bank of England and the Treasury in their forward planning following last week’s narrow vote to cut interest rates.
The decision shows a willingness by the Bank to set aside its inflation strategy to help stimulate the economy. Unemployment has been rising as recruitment has slowed due partly to the Chancellor’s hikes in employment costs.
There are also figures from the British Retail Consortium which follow the restructuring of River Island that will see 33 stores close. Footfall was down in July.
Among the corporate announcements, insurer Aviva will release its first results since acquiring Direct Line in a £6bn deal, with analysts divided on the short-term outlook.
Morgan Stanley analysts believe Direct Line could help Aviva exceed consensus forecasts. However, UBS analysts suggest investors will need to be patient, as a more detailed update on the integration won’t come until later in the year.
The insurer’s management has targeted £125m in cost savings from the acquisition, a goal shared prior to the deal’s completion. Dividends are expected to continue growing, with a yield forecast of 6.04% for 2025 and 6.48% for 2026.
In Aviva’s full-year results, operating profit rose 20% to £1.77bn, while the dividend climbed 7% to 35.7p a share. Looking ahead, the insurer is targeting £2bn of operating profit by 2026. General insurance premiums and assets under management also showed robust growth.
Danni Hewson, AJ Bell head of financial analysis says housebuilder Persimmon may be particularly interesting, for what it has to say about its own fortunes, those of its target market and also the wider UK economy, especially as the Labour government continues to target deregulation for planning, building and lending for residential property, as part of its growth programme.
Persimmon has said little since its full-year results in March, barring the announcement of the sale of FibreNest and a £15 million settlement with the Competition and Markets Authority.
Analysts’ consensus is for an increase in full-year operating profit to £447 million from £369 million, helped by a 4% increase in sales to £3.3 billion and the absence of last year’s £36 million in exceptional charges.
Persimmon has forecast between 11,000 and 11,500 completions this year, up from 10,664 in 2023.
Its shares have dropped by more than 25% over the past year, despite broader market gains. Rising input costs, sluggish interest rate cuts, and housing affordability issues continue to weigh on the company.
The board distributed 20p a share to investors at the first half stage a year ago. Analysts expect a small increase in the full-year payment for 2025, to 62p a share from 60p.
DIARY
Monday 11 August
- First-half results from Marshalls
Tuesday 12 August
- First-half results from Entain
- Trading updates from Bellway
- British Retail Consortium UK retail sales
- UK unemployment, employment and wage growth
Wednesday 13 August
- First-half results from Balfour Beatty and Persimmon
Thursday 14 August
- First-half results from Aviva, Admiral and Savills
- AGM, Calnex Solutions
- UK Q2 GDP growth
- UK industrial, manufacturing and construction output
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