Inflation data out this week is expected show the growth in prices at its lowest level for nearly a year, booting expectations of a cut in interest rates next month.
The January figure is forecast to come at 3%, from 3.4% in December, bringing it down to its lowest since March 2025.
With GDP barely growing, there are hopes that the Bank of England will see the fall in inflation as a prompt for a rate cut in order to help the economy.
However, among those who voted 5-4 at the last meeing to keep rates on hold was economist Huw Pill who told an event hosted by Santander on Friday that inflation is not falling as rapidly as the Bank had hoped.
That was taken as an indication that he will again vote to hold rates at the 19 March meeting of the Bank’s monetary policy committee.
The Bank has projected that inflation will fall to about 2% by April or May, but much of the anticipated decline is likely to be driven by government measures to lower energy prices rather than broader economic dynamics.
The week ahead also includes data on unemployment and wages on Tuesday and government borrowing and retail figures on Friday.
Springfield Properties
Springfield Properties is the latest housebuilder to report figures in what remains a testing climate, despite the downward trajectory for interest rates.
However, the Scottish company has secured a solid stream of business linked to the growth in the renewables sector. It signed its first agreement with SSEN Transmission to build 293 homes in the north of Scotland for workers involved in upgrading the energy network.
The homes will be built on six sites across Highland, Moray and Aberdeenshire and leased for four years.
At the end of the lease period, Springfield will have the option of selling the houses privately, or to private rented sector providers as well as affordable housing providers. Other deals are likely to be forthcoming.
The company has continued to perform well in affordable housing and has seen a a significant reduction in bank debt.
Chief executive Innes Smith said in December’s traing update that the company expects to report almost unchanged revenue of approximately £106 million for the six months ended 30 November from £105.6m in the prior year.
BAE Systems
Shares in BAE Systems have had a stellar run followering the Russian invasion of Ukraine, war in the Middle East and a general heightening of geopolitical tensions.
How NATO members plan to fund additional spending remains a vexed one, say AJ Bell analysts, given the stretched nature of many Western governments’ balance sheets.
Uncertainty over US foreign policy, and Russia’s intentions, may yet force additional spending, and BAE Systems would be well placed to capitalise.
In the near term, however, all eyes will now turn to the full-year results, for which chief executive Charles Woodburn has already offered reassuring guidance alongside a third-quarter trading update in November.
This includes sales growth of 8% to 10% where analysts are looking for just under £31 billion, and underlying operating profit growth of 9% to 11%, to £3.3bn.
DIARY
Monday 16 February
- Rightmove UK house price index
Tuesday 17 February
- Full-year results from InterContinental Hotels
- First-half results from Springfield Properties
- UK unemployment, job vacancies and wage growth data
Wednesday 18 February
- Full-year results from BAE Systems
- First-half results from Pan African Resources
- UK inflation figures
Thursday 19 February
- Full-year results from Centrica
Friday 20 February
- GfK UK consumer confidence
- UK retail sales
- UK Government borrowing
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