Newspaper article The Journal (Newcastle, England)

A Flurry of Half-Year Results Due This Week

Newspaper article The Journal (Newcastle, England)

A Flurry of Half-Year Results Due This Week

Article excerpt

Byline: Iain Laing

THE half-year results season gets into gear this week with updates from GlaxoSmith-Kline and Capita, alongside the latest estimate of UK growth.

The eagerly-awaited preliminary estimate of Britain's second quarter output will cap another busy week for economic news.

Analysts expect the recovery to have picked up pace in the three months to the end of June, following a bounce back in manufacturing and services output.

The British Chambers of Commerce - BCC - is forecasting growth of between 0.6% and 0.7%, while Investec chief economist Philip Shaw is predicting a 0.6% rise in the level of gross domestic product - GDP. This would mark a decent improvement on the 0.3% recorded in the first quarter.

Borrowing figures tomorrow will also attract significant attention and no doubt once more raise the issue of Government spending cuts and whether austerity measures will be enough to plug the deficit.

Investec believes June's figures may show a slight reversal of recent improvements - pencilling in public sector net borrowing of pounds 17bn, up pounds 2bn on a year earlier - although it said this would be largely as a result of tougher comparatives.

Minutes of the last interest rates meeting are also due on Wednesday, followed by official retail sales data on Thursday in a flurry of economic indicators.

Meanwhile, drugs giant GlaxoSmithKline's second-quarter results on Wednesday will see a huge pounds 1.57bn provision for legal disputes put a significant dent in profits. The bill comes on top of the pounds 2.3bn which the firm has already put aside and represents an "substantial proportion" of its legal cases.

Glaxo, which has more than 900 staff in Barnard Castle in County Durham, has agreed a pounds 500m settlement with the US Government after its probe into a factory in Puerto Rico after allegations that it was not following proper manufacturing procedures.

The provision will also go towards settling claims over drugs, such as its diabetes treatment Avandia, which has been under a cloud since 2007 amid claims - denied by Glaxo - that it increased the risk of heart attacks. …

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