Byline: Iain Laing
ABARRAGE of worrying official economic data is expected this week alongside less than encouraging news from major retailers just before Chancellor Alistair Darling delivers his Budget.
Supermarket giant Tesco will report annual profits tomorrow after a year of stiff competition and the group's worst Christmas in almost 20 years.
Tesco has been losing market share as hard-up consumers switch between supermarkets in search of the best value for money.
It saw like-for-like sales increase by 2.5% over the seven-week festive period, which was much weaker than rivals such as Morrisons and Sainsbury's.
This was on top of 2% growth in the third quarter, half the rate seen the previous three months and the worst performance since the last recession.
And the most recent data on the sector suggests Tesco's share has fallen again to 30.4% for the 12 weeks to March 22.
However, the difficult trading climate is not expected to have derailed full-year profits growth. Analysts at Shore Capital Stockbrokers are expecting profits to lift by 5% to pounds 3bn, while it is thought that the group will see its till takings exceed pounds 1bn a week for the first time.
The profits growth is a substantial drop on the 11.8% rise seen the previous year and shows the retailer is facing more challenging times, but Shore
Capital said its managerial and operational strength will see it through.
Fresh official figures are set to show the UK economy remains deeply mired in recession while the measure of inflation used in wage negotiations slumped below zero.
Data out on Friday is predicted to show a decline of 1.5% for the UK economy in the first quarter of this year - almost unchanged from the 1.6% contraction seen in the last three months of 2008. The UK is now predicted to see a 3.7% slump this year, with little or no recovery in 2010.
Meanwhile households are braced for a further slump in the Retail Prices Index (RPI) - the measure of inflation that governs private sector salary deals and pension payments - while the overall cost of living continues to grow.
Economists predict that the Office of National Statistics (ONS) inflation data tomorrow will show that the Retail Prices Index (RPI) slumped below zero for the first time in almost 50 years in March. …