With the Bank of England having raised interest rates at the start of this month, the latest round of UK employment, average earnings, released on Tuesday, will be eyed keenly for indications of whether the move was justified or not.
In a preview, economists at RBC Capital noted that the last three months have seen employment gains of 197,000, 146,000, and 137,000, and said the “continued ability of the labor market to generate employment was a key influence on the BoE’s decision to raise interest rates at its last meeting.”
For the latest numbers they are forecasting a jobs gains in the region of 100,000, with the unemployment rate holding steady at 4.1%.
For earnings, the RBC economist don’t see any change from last month and expect both the numbers including and excluding measures of wage growth to remain unchanged at 2.5% and 2.7%, respectively.
Major surprises unlikely from Antofagasta
On the corporate front, blue-chip miner Antofagasta PLC (LON:ANTO) is unlikely to have any big surprises up its sleeve when it reports its first half results on Tuesday, having recently updated investors on trading.
The Chilean-focused group published a second-quarter trading update in July, which showed copper production rose 6.1% to 163,200 tonnes from 153,800 tonnes a year ago. Higher output at its Centinela and Antucoya mines mitigated declines at Zaldívar and Los Pelambres, which was hit by a blockage in the concentrate pipeline in April and May.
Antofagasta left its full-year guidance unchanged for production of 705-740,000 tonnes and net cash cost of US$1.35 per pound.
Bid approach to overshadow esure interims
Meanwhile, esure Group PLC (LON:ESUR) provided a surprise on Monday after it revealed that it was “minded to recommend” a takeover proposal from private equity firm Bain Capital which is likely to overshadow the firm’s latest interim results.
The FTSE 250-listed home and motor insurer said that, following discussions and a period of due diligence, Bain Capital had submitted a bid proposal of 280p in cash for each esure share, a 37% premium to last Friday’s closing price.
In recent years, esure’s results have been dependent on 'non-underwritten additional services' for most of its profits, which includes providing third-party services to its customers, such as breakdown assistance, and motoring legal protection.
Given the importance of these ancillary services, insurance itself has been something of a loss leader in recent years, but significant progress in underwriting last year means that could be about to change.
esure’s combined operating ratio, a key measure of underwriting performance, improved from 98.8% to 96.7% last year, and analysts are hoping for more progress in the first-half.
Significant events expected on Tuesday August 14:
Interims: Antofagasta PLC (LON:ANTO), esure group PLC (LON:ESUR), Capital & Regional PLC (LON:CAL), JPJ Group PLC (LON:JPJ), Mears PLC (LON:MER), John Menzies PLC (LON:MNZS), Polypipe PLC (LON:PLP), Realm Therapeutics plc (LON:RLM), Touchtone Exploration Inc (LON:TXP), Apax Global Alpha Limited (LON:APAX)
Finals: Falanx Group Ltd. (LON:FLX)
Trading updates: Castings PLC (LON:CGS)
Economic data: UK unemployment, average earnings; German ZEW survey; US import, export prices