UK financial markets are set for somewhat of a quieter week next week after the Bank of England kept rates on hold at 5.25% on Thursday. However, there are still a few things to watch out for, including earnings from ABF (LON: ABF), B&M (LON: BME), and Wizz Air (LON: WIZZ), as well as UK GDP and house price data.
1. Earnings from ABF, B&M, and Wizz Air
Three companies we keep a keen eye on are scheduled to release earnings next week: Associated British Foods (ABF), B&M, and Wizz Air.
Primark owner ABF has been resilient in the face of rising inflation, supply chain disruptions, and geopolitical tensions. Nevertheless, investors will be keen to see how it has performed when it reports its annual earnings on Tuesday, November 7. The company raised its full-year profit outlook in September for the second time in four months. At the time, ABF said its adjusted operating profit would be “slightly better” than its previous expectation of “moderately ahead” of 2021/22’s £1.435 billion.
Discount retailer B&M has benefited from consumers looking for cheaper alternatives during the cost-of-living crisis, and its shares have reacted positively, up 30% YTD. The company will report its FY24 interim results on Thursday, October 9. They are expected to be another strong set of results, but investors will be watching out for any signs that its growth is starting to slow.
Wizz Air, like other travel-related businesses, has been benefiting from the continued strong travel demand, but that demand hasn’t shown in its share price. The company will report its H1 F24 results on Thursday, November 9. After a slump in its shares since May, WIZZ surged on Friday ahead of the release. There have been concerns about the impact of the Israel-Palestine conflict, while there are also worries regarding issues with the Pratt & Whitney GTF engines.
2. UK GDP
The UK Office for National Statistics is scheduled to release preliminary Q3 GDP growth data on Friday, November 10.
QoQ, the consensus expectation for UK GDP is -0.1%, while the forecast is at 0.0%. MoM, the consensus expectation is -0.1%, while the forecast stands at 0.1%. Investors will be watching the GDP data closely for any signs that the UK economy is starting to slow down more sharply. A weaker-than-expected GDP reading could lead to further weakness in the pound and UK stocks.
3. UK House Prices
The UK housing market has been cooling in recent months, as rising interest rates and the cost-of-living crisis have made it more difficult for people to afford to buy homes.
On Tuesday, we will get a glimpse of how the UK housing market is performing with the release of the latest Halifax house price index report. Analysts expect it to show that UK house prices fell again YoY in October, continuing the trend from recent months. In September, house prices were 4.7% lower YoY, representing a sixth consecutive monthly fall.
In the September report, Kim Kinnaird, Director of Halifax Mortgages, said: “Many economists and financial markets predict that Base Rate will remain higher for longer, with any significant cuts appearing unlikely until inflation gets closer to the Bank of England’s 2% target. Overall, these factors are likely to keep mortgage rates elevated in comparison to recent years, constraining buyer demand and putting downward pressure on house prices into next year.”
By James Fyeman