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The week ahead: attention shifts to Christmas spending

The week ahead: attention shifts to Christmas spending

With few corporate updates this week, attention will switch to the economy and the spending power of consumers in the run-up to Christmas.

Inflation is expected to dip in figures released tomorrow, but economists see it as a temporary reprieve as the cost of living is set to rise in the months ahead.

The consumer price index is forecast to have fallen slightly to 2.6% in November, from 2.7% in October, in figures from the Office for National Statistics.

The impact of energy bill increases from supplier SSE will be offset by the effect of steeper utility bill rises in November last year, but with further hikes from other providers due in the months ahead, CPI inflation is predicted to peak at 3.5% by mid-2013.

And in a busy week for economic releases, public finance figures are forecast to bring some cheer to the Chancellor and reveal a drop in borrowing in November, while retail sales for the same month will receive a pre-Christmas boost and rise by around 0.3%.

Demand for temporary power in the US following superstorm Sandy should have helped Olympics contractor Aggreko in the wake of a profits warning.

It received a £59 million boost from its London 2012 contract, but said in October that its overall results were impacted by unfavourable currency movements and as bad debt provisions increased.

Since then, Aggreko has won work in the US where the superstorm knocked out the main power supply in many parts of New York and along the east coast.

While storm-related revenues are not an unusual occurrence for Aggreko, Seymour Pierce analyst Caroline de La Soujeole said events in the US could provide a 2% boost to pre-tax forecasts for its year end. The company is due to post another trading update today.

The City currently predicts the group will post full-year pre-tax profits of £364.8m, up from £307.1m in 2011.

The Glasgow-based group said in October that underlying revenues rose 13% in the third quarter, helped by the Olympics work.

The return of former Loose Women presenter Coleen Nolan as the face of Park’s Christmas savings advert should help drive a strong performance in its interim results tomorrow.

Analysts at Arden Partners predict the group will see a further jump in pre-tax profits to £9.5m for the year to next March, up from £8.6m a year earlier.