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Week in Review: FTSE calm as Bank of England holds rates

19 March 2021

Categories: The week in review


Both the FTSE 100 and 250 were relatively flat on Thursday, posting small gains as the Bank of England announced it was holding interest rates at 0.1%. The FTSE 100 was up a modest 0.25% after a day of fluctuations, finishing the day at 6,779.68, while the FTSE 250 rose fractionally by 0.05% after similar swings. The FTSE 250 finished the day on 21,568.56 – just shy of its all-time high, 21,780, reached on 21 February 2020.

  • With Monday light on announcements, the Office for National Statistics (ONS) kicks off the week on Tuesday (23 March) with the latest UK monthly unemployment figures.
  • The ONS follows up on Wednesday (24 March) with inflation and house price data.
  • On Thursday (25 March) Markit reports its latest UK household finance index.
  • And finally, the Society of Motor Manufacturers & Traders reports the latest auto manufacturing figures on Friday (26 March).

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We’re more than one year into the coronavirus crisis now and among the worst hit sectors in the world is retail.

Before coronavirus the High Street was already under pressure from online rivals with many firms closing up shop or going out of business. But there are bright spots among the gloom.

Kingfisher (KGF), for example, was under great pressure ahead of the pandemic, but has witnessed something of a revival thanks to stay-at-home orders. B&Q’s parent has benefited from exemptions to shop closures and a wave of householders looking to do up their properties while stuck at home. The firm updates the market with its full-year results on Monday (22 March).

Elsewhere though, firms such as Cineworld (CINE) have really struggled in the crisis, effectively prevented from doing business at all for over a year. That being said, its share price has performed very well so far in 2021 as investors anticipate a return to normality – something that could become a trend more widely among retailers as lockdowns lift and vaccines take effect.

The cinema chain reports its full-year results on Thursday (25 March), with the share price still trading far below its pre-pandemic lows.

Finally, on Friday (26 March) the ONS reports the latest UK monthly retail sales figures which will give an insight on how the retail sector is coping more broadly. Firms will be hoping that we may be past the final nadir in footfall as the UK economy opens.


UK Chancellor Rishi Sunak has already given his most recent economic and taxation update at the beginning of March – but new analysis of his Budget numbers have revealed a fiscal black hole that will need to be filled.

The Institute for Fiscal Studies has said in a new report that from the tax year 2022-23 the UK will face a £4 billion spending deficit in its balance sheet.

The inevitable question then is what fills this space? The government has three choices: spend less, tax or borrow more.

With borrowing at all-time highs, it is unlikely to plump for this option. And with taxation not typically a popular choice, and some tax raising policies snuck through already, it may come to austerity measures once again to fill the void.

This would prove controversial as critics argued the last time a Conservative-led government implemented austerity that cutting spending hampers growth at the precise moment when the economy needs stimulation.

Sunak may see some austerity measures as a good choice for burnishing his fiscal conservative credentials though, but it won’t ultimately stop him drawing criticism – something that is already happening over the 1% NHS pay increase.


Many pundits are now tipping UK shares to stage a recovery in 2021 and beyond. UK mid-caps are already showing signs of strong growth. If you want to gain exposure to these firms, you may want to consider AXA Framlington UK Mid Cap Z GBP Acc (GB00B64W4Q70). The actively managed fund seeks to pick UK-focused businesses that will outperform their peers over the long term, focusing on medium-sized companies. It has returned 52% over five years and charges an OCF of 0.84%.


22 March – Gold miner Centamin (CEY) reports its full-year results on Monday. The firm has had a mixed year – its share price surged on the rising price of gold but has since deflated significantly thanks to the precious metal’s price retreat as the global economy began to reflate. While some analysts predict gold to increase in value again, Centamin’s share price has been weighed upon by issues at its Egyptian mine more recently.

25 March – Peer to peer lender Funding Circle (FCH) reports its full-year results on Thursday amid what has been a testing period for the sector. The regulator effectively killed off an entire section of the market with strict changes to lending and investing conditions. But this has led to many competitors exiting the market leaving Funding Circle one of the few traditional P2P lenders focused on the sector. The firm IPO’d in 2018 but its share price is now over 75% below its initial price. That being said, it performed better in 2020. Investors will be looking at the results to see if anything has materially changed for the firm to make it a more interesting opportunity.


Author: MRM Categories: The week in review