Wednesday preview: BoE minutes, Budget, Sainsbury

22nd Mar 2011 18:38

Corporate news is set to take a back seat to economic news as Wednesday sees the release of the minutes from the most recent meeting of the Monetary Policy Committee (MPC), and it is also the day the Chancellor of the Exchequer, George Osborne, delivers his second Budget speech.The MPC has become progressively more hawkish on the interest rate front as UK inflation stubbornly refuses to head south. For a long time Andrew Sentance had been the lone voice on the MPC voting for a hike in interest rates, but the ranks of the hawks grew to three in February and economists are curious to learn whether any more have "gone over to the dark side".Bank of England governor Mervyn King is a committed dove, however, and his deputy, Charles Bean, also seems likely to have remained in the doves camp at the last vote.In an interview with The Times newspaper last week Bean came out in favour of a "wait and see" stance on policy tightening after the shock contraction in gross domestic product (GDP) in the fourth quarter."The question is does that indicate the recovery running out of steam or not? It could just be rogue data, it could just be a temporary soft patch. We know economies often go through soft patches during recoveries, but it might indicate a more durable slowing, possibly connected with people becoming more concerned about the impact of the fiscal consolidation," Bean said.As for the Chancellor's Budget speech, Osborne has promised a finance bill that is "unashamedly pro-growth, pro-enterprise and pro-aspiration," as he seeks to move the UK economy from rescue mode to reform mode.The aforementioned fourth quarter contraction in GDP might have put a crimp in his plans, however, but on the plus side the tax coffers have been fuller than expected in recent monthsAn acceleration of his previously announced plan to cut a penny per pound off corporation tax each year is possible, though a bit of a long shot, unless the government has been rattled by thinly veiled threats from banking giants Barclays and HSBC about moving their headquarters abroad for tax purposes. Osborne may have some wiggle room because the Office for Budget Responsibility, the "arms length" government body appointed to make independent forecasts for the Chancellor, may be about to revise down its estimate of the public sector borrowing requirement by £8bn.On the company news front, a trading statement from supermarket group Sainsbury (J) is expected, covering the group's fourth quarter.Japanese broker Nomura expects the group to post fourth quarter like-for-like (LfL) growth (ex-fuel, VAT-inclusive) of 1.5%, down from a 3.6% increase in the third quarter, "reflecting a low growth grocery market since Christmas, and the travails of the UK consumer," says analyst Nick Coulter. Even though the impact of new space on sales is estimated to tick up to 2.5% for the quarter, full-year LfL forecasts are lowered by Nomura from 3% to 2.3%, and the pre-tax profit forecast is cut by £5m to £665m. Cake and bread maker Finsbury Food's interim results should show a return to growth for the cake division, reckons Panmure Gordon, and continued strong growth from the "Bread and Free From" division.The broker forecasts profit before tax will remain flat at £1.8m.INTERIMSFinsbury Food Group, Smiths GroupINTERIM DIVIDEND PAYMENT DATEMedusa Mining Ltd. (DI)INTERIM EX-DIVIDEND DATEBrooks Macdonald Group, Close Brothers Group, Craneware, Go-Ahead Group, London Finance & Investment Group, NWF Group, Photo-Me International, Thorntons, Tristel, Utilico Investments Ltd (DI), Waterman GroupQUARTERLY PAYMENT DATEFrontline Ltd.QUARTERLY EX-DIVIDEND DATEPremier Energy & Water Trust, Real Estate Credit Investments Ltd.INTERNATIONAL ECONOMIC ANNOUNCEMENTSIndustrial New Orders (EU) (10:00)Consumer Confidence Indicator (EU) (10:00)MBA Mortgage Applications (US) (11:00)Crude Oil Inventories (US) (14:30)New Homes Sales (US) (14:00)Q4Eastern Platinum Ltd.GMSLansdowne Oil & Gas, Real Office GroupFINALS21st Century Technology, @UK, Alliance Pharma, Cyprotex, Eastern Platinum Ltd., Espirito Santo Financial Group SA, Eurasian Natural Resources Corp., Hansteen Holdings, Henry Boot, Huntsworth, Landkom International, Lighthouse Group, Lupus Capital, Melrose Resources, National Bank of Greece ADR, Plaza Centers NV, Portmeirion Group, Proximagen Group, S & U, StatPro Group, VislinkSPECIAL EX-DIVIDEND PAYMENT DATEUtilico Investments Ltd (DI)AGMSBeazley, Chrysalis VCT, Heavitree Brewery, Safestore HoldingsTRADING ANNOUNCEMENTSSainsbury (J)UK ECONOMIC ANNOUNCEMENTSBBA Mortgage Lending Figures (09:30)BoE Interest Rate Minutes (09:30)Chancellor Budget Statement (12:30)FINAL EX-DIVIDEND DATEAll Leisure Group, Amlin, Aviva, Braime (T.F.& J.H.) Holdings (Non-Voting), Cenkos Securities, Chemring Group, French Connection Group, Hotel Corp., InterContinental Hotels Group, Low & Bonar, Maintel Holdings, Millennium & Copthorne Hotels, Promethean World, Schroders, Schroders (Non-Voting)