Wednesday preview: BoE meeting, Rolls Royce in the spotlight

All eyes on Thursday will be on the Bank of England and what the Governor, Andrew Bailey, has to say on the outlook for policy.

No change in Bank’s main policy settings is anticipated.

However, according to Samuel Tombs, chief UK economist at Pantheon Macroeconomics, the Monetary Policy Committee may articulate for the first time what it deems to be the so-called ‘effective lower bound’ for interest rates.

So too, he said, the MPC might lower the threshold that Bank Rate must reach before it starts to wind down quantitative easing.

Across the Channel meanwhile, at 0700 BST, Germany’s Federal Office of Statistics will publish a reading on factory orders in June.

They will be followed at 0900 BST by the European Central Bank’s latest monthly economic bulletin.

Stateside, the market spotlight will be on weekly jobless claims figures and a reading on foreign trade in June, both at 1330 BST.

On the corporate side of things and for Rolls Royce‘s first half financials, UBS analyst, Celine Fornaro, has penciled-in a year-on-year drop of 12% to reach roughly £4.87bn.

That put her approximately 11% below the market consensus.

The engine maker’s earnings before interest and taxes meanwhile were seen printing at -£160.0m against consensus on -£129.0m.

Underlying her forecasts, Fornaro’s estimates called for a recovery in engine flying hours in 2021 and 2022 to 50% and 73% of 2019 flying hours, respectively.

Rolls however had guided towards 55% and 80% for each of those same years.

Indeed, the analyst expected the interims to be “another difficult set of results”.

She was also looking for more colour as regards orders, risk to the supply chain, inflationary pressures, its cost and cash control programme, and looking forward to meeting the new finance chief.

Wednesday 4 August


Ferrexpo, Hiscox Limited (DI), Legal & General Group, Morgan Sindall Group, Taylor Wimpey


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