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‘No change’ tip for inflation, Wood deadlline nears – Daily Business

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Sainsburys-local — *Sainsbury’s is locked in a price war (pic: Terry Murden / DB Media Services)*

Inflation in the UK is expected to remain unchanged at 2.8%, ahead of the impact of the global trade war and this month’s energy price rise.

The figure, released on Wednesday, will also precede the next meeting the Bank of England which had been tipped to cut interest rates.

Deutsche Bank senior economist Sanjay Raja says in a note to clients, “we expect inflation to move sideways in March”, but adds, “risks are skewed to the upside”.

AJ Bell head of investment analysis Laith Khalaf points out: “The Bank of England will be keenly aware the inflationary outlook isn’t entirely one-sided.

“Cheaper oil will push down on UK inflation, giving the Bank of England scope to cut rates without worrying about rising prices.

“Likewise cheaper goods flowing into the UK instead of the US could help dampen inflation. However, on the flip side of the coin, exchange rate movements could create inflationary headwinds.”

Deutsche Bank forecasts “inflation picking up further through the spring and summer” to peak at 3.7% this year.

Wood Group

Middle East company Sidara has until 5pm on Thursday to make its intentions known towards Aberdeen-based Wood Group. Sidara has already been given an extension to scrutinise the books which points to an agreement well below the price Sidara was prepared to offer last summer.

Barratt Redrow

Barratt Redrow issued well-received first-half results in February, the first since last year’s merger of the two housebuilders.

Chief executive David Thomas guided towards profit at the top end of the range, launched a £100 million share buyback and increased the company’s medium-term guidance for both housing completions and profit margins.

Management is unlikely to say anything more about the dividend until the summer’s full-year results, but Barratt Redrow has a target dividend cover ratio of 1.75 times (for a 57% payout ratio), and it increased the interim payment by a quarter to 5.5p a share.

Shares currently trade at 12-month lows, thanks to uncertainty over the UK’s economic outlook.

Sainsbury’s

The firm is locked in a dogfight with Tesco, Morrisons, Asda and the discounters, Aldi and Lidl. and an operating margin of barely 3.5% hardly suggests a company having its wicked way with its customers, say AJ Bell analysts.

Chief executive Simon Roberts will be expected to give his views on the price war.

Forecasts are for adjusted pre-tax profit of £754 million, from £701 million last year, with further progress expected to £811 million in the year to March 2026.

Sainsbury’s is in the process of selling its banking arm to NatWest and it has also sold the Argos store card portfolio. The plan is to generate some £250 million in cash from these transactions and then return that money to shareholders.

Analysts believe the FTSE 100 index constituent will increase its full-year dividend to 13.4p a share from 13.1p a share a year ago, with a further hike to 14.2p in the year to March 2026.

DIARY

Monday 14 April