The Week Ahead (19-23 Jan): GDP beats expectations, will earnings follow?

Welcome to The Week Ahead. On Thursday, we learned that the UK economy itself beat expectations in November, printing GDP growth of 0.3%. That beat forecasts of 0.1% and erased the 0.1% decline seen in October.

Perhaps more significantly, we also learned that the German economy grew by 0.2% in 2025, after two straight years of recession.

This data is backward-looking, of course, and neither the UK nor German economies seem likely to deliver vigorous growth in 2026. But modest growth is certainly better than the alternative.

Source: Office for National Statistics

Company news so far this year has suggested that companies operating in economically-sensitive sectors such as retail and hospitality are enjoying mixed fortunes.

While post-Christmas updates from pub chains Mitchells & Butlers and Fuller, Smith & Turner have been relatively upbeat, reports from retailers have been a little more mixed.

The housing market is another area where commentary has remained cautious. FTSE 100 builders Persimmon and Taylor Wimpey both managed to sell more homes last year, despite uncertainty around the impact of November’s Budget. However, social housing and build-to-rent specialist Vistry suffered a fall in output as its partners waited for clarity on government plans (and funding).

Turning to secondhand homes and lettings, London-focused small-cap estate agency M Winkworth warned on profits on Wednesday, blaming a "temporary slowdown in activity". This was followed on Thursday by a cut to broker forecasts for Winkworth’s larger London rival Foxtons.

My overall impression is that homebuyer activity may be stabilising, but is not exactly on fire.

During the coming week, UK economic data is expected to include house prices, inflation and unemployment. These could provide further colour on whether the economy is heating up, cooling down or simply stagnating.

Turning to company news, next week will see a raft of post-Christmas updates from major high street operators.

Retailers B&M, JD Sports Fashion, Currys and Primark owner ABF (which has already warned on profits) are all due to report.

In the adjacent sector of hospitality, pub chain JD Wetherspoon is also due to issue a trading statement, as is travel caterer SSP Group.

Spoon’s chairman Tim Martin rarely misses a chance to lobby for his industry to be treated more fairly on tax relative to supermarkets, so I suspect next week’s update could include some pithy commentary on pubs’ business rates. These are expected to rise sharply as a result of pubs’ rateable values being updated from pandemic lows (in 2021) to reflect more normal trading in 2024.

The impact is going to be tapered in gradually and as always, I expect large chains such as Wetherspoons to handle the changes more easily than smaller independent operators. However, trade body the UK Hospitality claims that by 2028/29 an average pub’s business rates will have increased by 76%, compared with an increase of just 4% for a large supermarket.

Away from retail and hospitality, we’re also expecting updates from building materials suppliers Marshalls and Wickes next week, plus defence group QinetiQ.

International news

Looking across the pond to the US, rhetoric and tension around Iran eased this week. The likelihood of US strikes has seemingly fallen significantly. Oil prices reacted quickly but remain higher than they were at the end of last year:

However, the US Justice Department’s decision to launch a criminal investigation into Fed chairman Jerome Powell appeared to mark a further escalation in the administration’s campaign to undermine the independence of the US central bank.

Investors certainly seem to be taking a more cautious view on US assets. Emerging market debt specialist Ashmore reported a quarterly net inflow of $2.6bn (5.3%) into its funds on Thursday. CEO Mark Coombs cited investors rebalancing “overweight US positions” and an “increasingly complex geopolitical situation”.

Bond titan Pimco has also commented that it's diversifying portfolios away from US assets. Closer to home, small-cap asset manager Premier Miton reported a staggering 25% net outflow from its US-weighted international equity funds during the quarter.

The US has a public holiday on Monday, but earnings reports later in the week are scheduled to include Netflix, Visa, Intel and United Airlines.

An update from UK-listed promotional goods firm 4Imprint may also provide some insight into the health of SMEs in the US – 4Imprint generates virtually all of its sales in North America. We published a deep dive on this interesting business in November.

Finally, fans of the big European luxury houses will also have plenty to look forward to next week. LVMH and UK-listed Burberry are both expected to update investors over the next seven days.

Enjoy your weekend!

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Here’s a summary of what’s expected next week.

Economic Calendar

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Companies Reporting