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(Sharecast News) - On Thursday, investors will eye the latest policy announcement from the Bank of England, as well as half-year results from Lloyds Banking Group, Mondi, Rentokil, LSEG, BAE Systems, Rolls-Royce and Drax, and second-quarter numbers from Shell.
Half-year results from Anglo American, Haleon, British American Tobacco, CRH, Hammerson and Pets at Home will also be released.
As far as Lloyds is concerned, AJ Bell analysts Russ Mould and Danni Hewson said: "The shares have delivered double the FTSE 100's return this year, and hover near multi-year highs. Trading at a chunky premium to tangible book value, the valuation leaves little room for disappointment.
"Drawing a line under the motor finance commission scandal will be in focus with clarity expected on the regulator's redress scheme in relation to the bank's existing 1.95 billion provision.
"Investors have become accustomed to regular share buybacks and dividend hikes, so as Lloyds enters the final year of its current five-year plan, new medium-term targets are expected.
"CEO Charlie Nunn may use the half year update to outline the bank's capital allocation plans more broadly after the Bank of England's proposal to relax capital buffer rules."
In the US, quarterly results from Apple and Amazon are due, while in Europe, first-half results from German sportswear brand Adidas and Q2 results from Air France KLM, Sanofi and Societe Generale will be out.
Market participants will also be looking to the BoE, which is widely expected to leave Bank Rate unchanged at 3.75%.
ING said the rise in energy prices poses a fresh dilemma for the BoE, but it still doesn't think the bar for a rate hike has been met and is expecting another 7-2 vote to keep rates on hold.
"The Bank's updated forecasts are likely to show inflation fairly close to 3% in the second half of this year and into early next," said economist James Smith. "And crucially, that's well below the 4% threshold that the Bank has previously argued is statistically more likely to trigger second-round effects and a longer-lasting bout of price pressure.
"That doesn't necessarily mean much; those new forecasts almost certainly won't fully account for the latest rise in energy costs. The Bank typically uses average oil and gas prices over a threeweek observation window, likely beginning in early July. Compared with the Bank's middle 'scenario B' from April, gas prices were only modestly higher in 2026 and lower thereafter, while oil prices were lower across the curve over that time.
"Suffice to say those inflation forecasts would be higher if they were based on energy prices today. They would probably show inflation peaking somewhere between 3.5-4%."