Week Ahead

ECB gives rates clues, updates due on banks and beer

euros
The ECB is expected to hold interest rates

The Bank of England and the US Federal Reserve both kept interest rates unchanged at their last meetings, and analysts say it would be no shock if the European Central Bank did the same at its meeting on Thursday.

AJ Bell analysts say markets expect one more quarter-point hike to 4.75% from the Frankfurt-based ECB by the year end but that is expected to be the high for this rate-hiking cycle in the EU.

Rate hikes are slowing around the world and Felix Feather, European economic analyst at abrdn says: “The absence of any upside surprises to the underlying inflation data since the last monetary policy meeting of the ECB’s Governing Council makes a surprise move unlikely. We therefore expect a hold.”

Any comments on the future trajectory of interest rates will also be important, as that might help to set the scene for the US Federal Reserve and the Bank of England on 1 and 2  November respectively.

Markets are currently putting a 94% chance on no change from the Fed (at 5.5%) and an 83% probability of no change from the Bank of England (at 5.25%) at these meetings and the expectation is that there will be a maximum of one more hike from both before they pause for good.

The Fed’s first rate cut is currently pencilled in for July 2024 and the Bank of England’s for November 2024.

Barclays Bank reports third quarter figures on Tuesday and AJ Bell is pencilling in £2 billion in pre-tax profit, basically flat against both the second quarter of this year and the third quarter of 2022. Lloyds and Santander will provide trading updates on Wednesday, followed by NatWest (RBS) on Friday.

Scottish brewer and pub chain Innis & Gunn is splitting its AGM into two events in Glasgow (Tuesday) and Edinburgh (Wednesday) and those who are not just there for the beer may want some guidance on its current trading performance after Daily Business reported that it made a £2.37m loss last year.

The beer theme continues on Thursday when Tennent’s owner C&C Group delivers first half results.

DIARY

Tuesday 24 October

  • Q3 figures from Barclays
  • Trading statement from Bunzl and Anglo American
  • UK unemployment data

Wednesday 25 October

  • Full-year results from ASOS
  • Trading statements from Reckitt Benckiser, Lloyds, Santander. Fresnillo and Ibstock

Thursday 26 October

  • First-half results from C&C Group
  • Trading statements from Standard Chartered, Renishaw, Alumasc, Bloomsbury Publishing, Inchcape and Hunting

Friday 27 October

  • Trading statements from British Airways owner International Consolidated Airlines and NatWest


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