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Hello and welcome to the working week,
In an important election year, the UK is holding the most important election this week, but it is only open to a few hundred backbench MPs from Westminster. This is the vote to refresh the Conservative Party’s parliamentary governing body, the 1922 Committee.
The first task for the new group of 18 Conservative backbenchers after Monday’s plebiscite will be to agree the rules for the election of their party’s new leader (i.e. the UK Prime Minister). This should be completed by September. A group of MPs have already thrown their hats into the ring but these could be whittled down to a shortlist of two within days, according to the FT parliamentary team.
The timetable for deciding the new Prime Minister is important and serious, with UK inflation the highest in the G7 and the country’s growth next year (if it increases at all) expected to be the slowest, according to the IMF. There is a critical need for someone competent to guide the country through the interim period before the general public again decides its government through general elections.
Moreover, the British summer of discontent continues. If anything, it’s gaining momentum. Criminal lawyers will be out again on Monday, for reasons explained in this article from a legal insider. Other train issues are on the cards with unions Aslef, representing train drivers, and TSSA, representing more than 6,000 Network Rail workers, voting for strike action. And on Friday, a ballot for industrial action ends for university and college union members in a separate dispute over low pay, unmanageable workloads and professional respect. This could lead to further disruption for students at UK universities and colleges once this long hot summer of unrest is over.
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It’s a busy week for major economic data announcements, including inflation figures for the US, UK, France and Germany – perhaps indicating whether the rising cost of life is approaching a peak – along with GDP data from China and the UK.
The Federal Reserve releases its latest Beige Book on the current state of the US economy and the New Zealand and South Korean central bank rate-setting committees could raise their respective rates by 50 basis points. Also, Croatia is accepted as the last member of the Eurozone group.
US banks will kick off US earnings season this week, with bumper results expected thanks to the Fed’s series of interest rate hikes. Analysts expect JPMorgan Chase, Bank of America and Citigroup to see the growth in net interest income, the difference between what banks pay depositors and what they earn on loans and other assets.
The big fear is the recession. Banks are usually the hardest hit stocks during downturns. When trouble looms, pressure mounts to increase capital reserves in case existing loans go bad.
Main economic and corporate reports
Here’s a more comprehensive list of what to expect in terms of corporate reports and economic data this week.
Germany, ZEW Economic Sentiment Survey
India, June Consumer Price Index (CPI) Data and May Industrial Production Figures
UK Retail Sales Report June, British Retail Consortium and KPMG
Results: Grafton Group S1 Commercial Update, PepsiCo Q2
Canada, the Bank of Canada’s monetary policy committee meets to set rates
China, June trade figures
EU, May industrial production data
France, final CPI figures for June
Germany, final CPI figures for June
New Zealand, Reserve Bank of New Zealand Monetary Policy Committee Meeting
South Korea, rate-setting meeting
UK, June GDP figures plus May trade and services production data
United States, June CPI figures and the Federal Reserve releases its latest Beige Book on current economic conditions
Results: JD Wetherspoon AF, Page group Q2 Trade Update
EU and European Commission publish their summer economic forecasts
Japan, industrial production figures for May
United Kingdom, Royal Institution of Chartered Surveyors Monthly Housing Market Survey
United States, June PPI data
Results: Barratt Developments business update, Ericsson Q2, Experian Q1 Commercial Update, Railway H1, JPMorgan Chase Q2, Morgan Stanley Q2, Rio Tinto Report on Q2 operations, Tallow oil business update
Results: Bank of New York Mellon Q2, black rock Q2, Burberry Q1 Commercial Update, Citigroup Q2, Svenska Handelsbanken H1, Wells Fargo Q2
Finally, here’s a look at some of the other events and milestones from this week.
EU and eurozone finance ministers to meet in Brussels
United Kingdom, continuation of the strike by criminal lawyers in England and Wales following the reduction of legal aid. In addition, the TSSA votes out more than 6,000 Network Rail workers in a dispute over pay, conditions and job security
UK, Conservative Party 1922 committee members elected, who will then approve the terms of the leadership election to decide the country’s next Prime Minister
EU and ministers from 27 member states must pass the final three legal acts needed for Croatia to become the 20th member to adopt the euro
UK, Transport for London ends consultation on overhaul of city center bus services following government demand for major cost savings
United Kingdom, July 12 public holiday in Northern Ireland, commemorating the defeat of Protestant King William of Orange against Catholic King James II at the Battle of the Boyne in 1690
In the United States, New York sees the phenomenon of “Manhattanhenge”, where the sun sets in perfect alignment with the east-west numbered streets of the borough
France, July 14 public holiday, commemorating the events of the beginning of the French Revolution in 1789
Montenegro, National Day holiday, commemorating the date the country’s borders were officially recognized at the Congress of Berlin
US President Joe Biden kicks off Middle East tour visiting Israel, Palestinian territories and Saudi Arabia
Germany, Delegates to a conference of German Social Democrats in Hanover will discuss whether to expel former Chancellor Gerhard Schröder from the party over his close ties to Russia
Iraq, National Republic Day commemorating the overthrow of the Hashemite monarchy in 1958
UK, NHS releases May wait times for suspected and diagnosed cancer patients and Home Office releases June EU Settlement Program statistics. Additionally, the British Open, the oldest golf tournament in the world, begins in St Andrews
In the UK, BBC Proms music concerts begin at the Royal Albert Hall in London. Additionally, the Royal International Air Tattoo, Europe’s largest air show, begins at RAF Fairford in Gloucestershire. Also on Saint Swithin’s day when folklore says if it rains it will rain for another 40 days
In the United States, Donald Trump and two of his adult children have agreed to testify in a New York State civil investigation that begins today into the former president’s business practices. In addition, the World Championships in Athletics begins in Oregon, the first time they have been held in the United States
UK, workers at the Lancashire site of the Budweiser Brewing Group, which brews Budweiser, Stella Artois, Becks, Boddingtons and Export Pale Ale, begin a 36-hour strike over wages
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