Fires being fought in the north. Thunderstorms in the south. Both fitting metaphors for the week the government faces ahead of the crunch meeting at Chequers this Friday, where cabinet consensus for the UK’s economic relationship with the EU will be sought.
According to the BBC, Downing Street has produced a third model for handling customs post-Brexit, as Theresa May aims to bridge the divisions in her cabinet and the wider Conservative Party.
Details of the new plan are yet to be revealed and will it be interesting to see how much it differs from the two previous options on the table – a customs partnership or so-called maximum facilitation – which failed to bring the competing factions together.
The Times reports that Oliver Robbins, the government’s chief Brexit negotiator, has told ministers that there is no chance of striking a bespoke trade deal with the EU, with the options on the table either a Norway-style deal in which the UK remains in the single market and has to accept EU rules, or a simple free-trade agreement which grants limited access.
Andrés Manuel López Obrador, the left-wing former mayor of Mexico City, has won a landslide victory in the Mexican presidential election. Ballots are still being counted but Obrador, known by his initials Amlo, is on course to take 53% of the vote – more than double that of his nearest contender – and his rivals have conceded. Amlo has vowed to crack down on corruption, tackle the war on drugs and help the poorest in society.
Chancellor Angela Merkel’s coalition government is teetering on the brink after Horst Seehofer, her interior minister and leader of the Bavarian CSU, set an ultimatum, saying that he would resign unless Merkel accepted his demands for tougher immigration controls. During a meeting of the CSU party executive, Seehofer said that he had decided to resign from both his posts. However, party colleagues convinced him to stay on and try to resolve the party’s differences with Merkel’s CDU sister party. The CSU will now seek talks with the CDU early in the week.
Sir Andy Murray has withdrawn from this year’s Wimbledon. In a Facebook post, the two-time champion, now ranked 156th in the world after a lengthy injury-enforced absence, said that he had made the decision “with a heavy heart” but that “playing best of five set matches might be a bit too soon in the recovery process”. His attention now turns towards the US hard court season.
Business & Economy
Women are facing a “glaring” gender pension gap, according to Fidelity International. Females currently in their late 20s and early 30s will, on average, have an 11% smaller pension pot than their male counterparts by the time they retire due to motherhood commitments and lower pay overall. However, the investment manager accepted that the industry was partly at fault for failing to engage with women.
Barclay’s investment banking arm is considering a return to the South African and South Korean markets, representing a break from the transatlantic retrenchment which the bank initiated a few years ago. Sources cited in theFinancial Times said that plans are at an early stage, but that South Africa and South Korea have been identified as two markets which the investment bank would like to re-enter.
Deloitte’s quarterly survey of chief financial officers has shownpessimism about the long-term impact of Brexit to be at its highest level since the referendum. Having fallen down the list of concerns, Brexit once again tops the list of risks facing British businesses as the deadline for an agreement looms, according to the survey.
The week ahead
This week will see various tariffs in the tit for tat trade dispute between the US and others come into effect. Duties of 25% on 800 strategically important Chinese goods announced by President Trump in June come into effect on 6 July, whilst retaliatory Canadian tariffs on US imports entered force yesterday.
Thursday will see the publication of the minutes of June’s meeting of the Federal Reserve’s monetary policy meeting at which interest rates were lifted. Investors will be looking out for discussions on inflation, further rate rises and trade war fears.
On Friday, US employment data will be published in the form of Non-Farm Payrolls and Unemployment Rate reports. The figures are expected to reveal that the US economy created approximately 198,000 jobs in June and that the unemployment rate remained steady.
In UK corporate news, clothing retailer Superdry and online estate agent Purplebricks report their full year results on Thursday, whilst Sainsbury’s, St Mowden Properties, Persimmon, Associated British Goods and Bovis Homes are amongst the organisations updating the market with trading statements.
Mercia Technologies, Plastics Capital, Trakm8 Holdings, Zoo Digital Group
Eve Sleep PLC
Aseana Properties Ltd.
CVC Credit Partners European Opportunities Ltd GBP, JZ Capital Partners Ltd
UK Economic Announcements
(09:30) PMI Manufacturing
International Economic Announcements
(08:55): PMI Manufacturing (GER)
(09:00) PMI Manufacturing (EU)
(10:00) Unemployment Rate (EU)
(14:45) PMI Manufacturing (US)
(15:00) Construction Spending (US)
(15:00) ISM Manufacturing (US)
(15:00) ISM Prices Paid (US)
Columns of Note
In the Financial Times’ Big Read, Ralph Atkins and Scheherazade Daneshkhu examine Nestlé’s efforts to maintain its market position in the face of slowing sales and profits, an increasing number of smaller challengers, M&A activity and changing consumer tastes. They speak to chief executive Mark Schneider and a number of sector analysts to understand the recent activity of the world’s largest food and drink company.
In his column for The Sunday Times, Kevin Pringle examines the case of Gillian Martin MSP, who last week was sacked as an education minister before she could even take up the role due to blog posts she wrote more than 10 years ago. Whilst accepting that Martin’s comments were unacceptable, Pringle argues that, with 15 years’ experience as a college lecturer, Martin could have been an excellent minister for further education. He goes on to question the punishment, particularly in light of Holyrood pursuing a restorative justice policy based on the premise of rehabilitation.
Did you know?
According to the Guinness Book of Records, the longest penalty shoot-out in a professional football match came in the 2005 Namibian Cup final, played between KK Palace and Civics. A total of 48 spot kicks were required, with KK Palace eventually triumphing 17-16 following a 2-2 draw in normal time.
House of Commons
Oral Questions: Work and Pensions (including Topical Questions)
3rd allotted day – the spending of the Ministry of Justice – Mel Stride
3rd allotted day - The spending of the Department of Health and Social Care and Ministry of Housing, Communities and Local Government on health and social care - Mel Stride
House of Lords
Increase in demand for endoscopy services to prevent bowel cancer through early diagnosis - Baroness Benjamin
Improving railway connectivity within Wales - Baroness Bloomfield of Hinton Waldrist
Strategic rationale for the deployment of Royal Navy ships east of the Malacca Straits - Lord Wallace of Saltaire
Ensuring the UK's democratic system is resilient against Russian interference. - Baroness Kennedy of The Shaws
Report from the Select Committee on the Natural Environment and Rural Communities Act 2006 'The countryside at a crossroads: Is the Natural Environment and Rural Communities Act 2006 still fit for purpose?' - Lord Cameron of Dillington
Report from the European Union Committee 'UK–EU relations after Brexit' - Lord Boswell of Aynho
In recess until 3 September
House of Commons
Oral Questions: HM Treasury (including Topical Questions)
Ten Minute Rule Motion: Pets (Theft) – Ross Thomson
4th allotted day - The spending of the Department for Education - Mel Stride
4th allotted day - The spending of Her Majesty's Treasury on grants to the devolved institutions - Mel Stride
Main Estimates 2018-19 - Mel Stride
House of Lords
How many social homes for rent the Government estimate will be built under the affordable housing programme - Baroness Thornhill
Increases in customer water bills and levels of remuneration paid to water company executives - Baroness Jones of Whitchurch
Replacing the House of Lords with an elected second chamber - Baroness Jones of Moulsecoomb
Ensuring provision for women in the prison system is properly funded - Baroness Burt of Solihull
Legislation: Refugees (Family Reunion) Bill [HL] - Third reading - Baroness Hamwee
Report from the Select Committee on Political Polling and Digital Media 'The politics of polling' - Lord Lipsey
Report from the European Union Committee 'Brexit: reciprocal healthcare' - Lord Jay of Ewelme
With rumours that May is preparing to relax her red lines over leaving the single market and customs union, and the jurisdiction of the European Court of Justice, the European Research Group (ERG) of pro-Brexit Tory MPs has aimed to keep up the pressure on the prime minister. Jacob Rees-Mogg, chair of the ERG, has penned a piece for The Daily Telegraph, warning that May risks splitting the Conservative Party if she goes back on her word.
Only one thing is sure: May is running out of road to kick this particular can down.