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The week ahead… Bank of England and Topps Tiles

The main event of next week will likely be the policy decisions in both the UK and Europe around Thursday lunchtime.

The Monetary Policy Committee (MPC) will be revealing its policy decision at midday on Thursday with the majority of economists expecting the Bank of England (BoE) to ramp up its asset purchase programme, or quantitative easing (QE). Analysts at Investec are predicting that the MPC will signal a further £50bn of QE, taking the total asset purchase programme to £375bn. However, they think that a Bank rate cut from the current historically low level of 0.5% remains ‘off the cards’.

Meanwhile, it looks pretty quiet on the corporate front next week, with few heavyweight stocks scheduled to release trading statements or results. However, two retailers – N Brown and Topps Tiles – are expected to report quarterly updates on Tuesday and Wednesday morning, respectively.

N Brown, the internet and catalogues home shopping firm, noted challenging market conditions and fragile consumer confidence as current-year headwinds when it released its full-year results in May.

However, broker Jefferies said in a research note last month that trading pressures should ease over the year ahead: ‘Second-half calendar ’12 trading conditions should be more disciplined than last year following tighter buying trends across the sector and hopefully no reason for a repeat of the weather induced discounting experienced in 2011.

‘Moderating inflation should reduce pressure on UK consumer budgets through this year providing a more robust backdrop. N Brown’s decision to ease the credit terms it offers customers should add some self-driven stimulus too.’

As for Topps Tiles, the tiles and flooring specialist which reported its interim results in May, it was named by Peel Hunt a few weeks ago as its top pick of potential recovery stocks: ‘In a sector not lacking in companies looking for recovery, Topps offers a stable balance sheet, no risk of internet disintermediation and a business that has continued to build market share.’

Announcements include:

Monday July 02 – UK PMI Manufacturing

Tuesday July 03 - UK Mortgage Approvals and PMI Construction; Topps Tiles IMS

Thursday July 05 - BoE Interest Rate Decision

Source : Polly York – IFA Magazine

01 July 2012
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