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UK unemployment to show lockdown peak; insurer Pru and InterContinental Hotels provide Tuesday's corporate focus

While the UK government's furlough scheme has helped to prevent a massive wave of immediate job losses, a swathe of large firms have recently announced thousands of job cuts which could push the UK jobless figure higher

Intercontinental Hotels -

The first big event in the macro calendar this week comes on Tuesday with the latest UK unemployment figures for the three months to June, covering the worst period of the coronavirus (COVID-19) pandemic lockdown.

While the UK government's furlough scheme has helped to prevent a massive wave of immediate job losses - with unemployment only at 3.9% in May and near to the modern-day low of 3.4% in 1973 - a swathe of large firms have recently announced thousands of job cuts which could push the figure higher as they begin to take effect.

There are also concerns that unemployment may simply be a ticking time bomb as the furlough scheme begins to wind down before its planned end in October, meaning the 9mln workers on the scheme may simply find themselves moved off into the dole queue.

Aside from the data, a batch of UK corporate results will also be eyed, with blue chips InterContinental Hotels Group PLC (LON:IHG), Prudential PLC (LON:PRU) likely to be the main focus.

Check out InterContinental numbers

Holiday Inn owner InterContinental’s interim results will provide investors with their first look at the company’s finances during the coronavirus pandemic.

Revenues per available room (RevPAR) is expected to drop by more than half for the period as the lockdown battered the group’s second-quarter numbers, which saw RevPAR plunge 75%.

With the hit to the company’s profits likely to be big, cost-saving measures are likely to be at the front of investors minds, although the fact that the company’s hotels are mainly owned by franchisees could soften the blow provided they can pay their fees.

The company has been offering franchisees fee relief and flexible payments to help keep them afloat in this regard, however, this could have consequences for its bank balance.

Asia focus for Pru

For Prudential, analysts at UBS are estimating an 11% drop in operating profit to US$2.3bn due to a lower performance in the US, partially offset by growth in Asia.

The life insurance and financial services company is also expected to declare an interim dividend of 12.3 cents per share.

Investors are going to focus on the US business and a potential minority spin-off in the second half, alongside Asian sales trends given the coronavirus (COVID-19) lockdown disruption and political volatility in Hong Kong.

Significant events expected for Tuesday, August 11:

Interims: InterContinental Hotels Group PLC (LON:IHG), Prudential PLC (LON:PRU), Derwent London PLC (LON:DLN), Domino’s Pizza Group PLC (LON:DOM), Plus500 Ltd (LON:PLUS), Petrofac Ltd (LON:PFC), Quilter PLC (LON:QLT), Amino Technologies PLC (LON:AMO), JKX Oil & Gas PLC (LON:JKX), SDL Plc (LON:SDL), Zotefoams PLC (LON:ZTF), Gamesys Group PLC (LON:GYS)

Finals: Versarien PLC (LON:VRS),

Trading announcements: Bellway PLC (LON:BWY), S&U PLC (LON:SUS), Cairn Homes plc (LON:CRN)

Economic data: UK unemployment

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