Turkey’s constitution is set for sweeping new changes after its long-standing leader Recep Tayyip Erdogan claimed victory last night in the country’s presidential and parliamentary elections.
With nearly all of the ballot boxes opened, Erdogan and his ruling Justice and Development party had secured 52.5% of the votes, with his closest rival Muharrem Ince on 31%. The emphatic nature of the result came as something of a surprise after a sluggish performance on the campaign trail by Erdogan had opened the door to the possibility that Ince’s grassroots campaign might take the election into a second round, so increasing the possibility of a hung parliament.
Erdogan will now assume major new powers that some critics have argued will place too much power in the hands of just one person. The president will have the ability to intervene in the country’s legal system, as well as impose a state of emergency, granting him responsibility over the last remaining powers that had been independent. With the position of prime minister also being scrapped – a role Erdogan held for 11 years, before becoming president in 2014 – critics have argued that Turkey no longer has in place the checks and balances that are common with executive presidencies, France and the US being notable examples.
Erdogan himself has no such reservations, declaring in his victory speech that “Turkey has given a lesson in democracy to the entire world”. Lesson over, the president now returns to work with the task of turning around an ailing economy his number one priority.
The Turkish lira has fallen sharply against the US dollar in recent months, though it did climb 2.1% in Asia trading this morning. Analysts agree that confidence must now be rebuilt in order to sustain a flow of foreign investment, given that the strain the devaluation of the country’s currency has put a strain on the corporate sector and led to economists predicting that a recession may be on the way in the second half of this year.
Such worries didn’t appear to be on the minds of Erdogan’s jubilant supporters last night as they assembled in Istanbul to celebrate. His detractors, however, are left wondering if the president’s march to a complete authoritarian regime can be stopped and whether their vision for Turkish democracy has just become ever more distant.
MPs will vote today on whether to build a third runway at Heathrow airport. Tory MPs have been ordered to back the expansion, while Labour MPs have been given a free vote. With around 40 Labour MPs expected to support the government, the development is likely to receive Commons backing, despite rumours that the SNP would no longer back the proposal. Boris Johnson, a long-time critic of the plan, will miss the vote as he is abroad on government business.
Policing for President Trump’s three-day visit to the UK next month is expected to cost the taxpayer £5 million. With mass protests against his visit anticipated, between 5,000 and 10,000 officers will be employed to protect the US president. (£)
An investigation by The Times has found that more than 30,000 children aged between 10 and 15 now claim to be members of a gang. It was also discovered that a total of 70,000 youths up to the age of 25 were believed to be part of a gang network, a reality that Anne Longfield, the children’s commissioner, said showed criminals were preying on young people by “taking the place of society”. (£)
Business & Economy
China has attempted to cushion the impact of a potential trade war with the US by cutting the amount of reserves the country’s banks are required to keep on deposit at the central bank by $100bn. The People’s Bank of China announced yesterday that it would reduce the reserve requirement ratio for large commercial banks and smaller banks by half a percentage point. (£)
Deals for private equity firms have suffered their sharpest decline in the UK since the vote to leave the European Union two years ago. Analysis has shown that private equity firms in the UK generated £6bn in sales during the first half of the year, down from £20.7bn in the same period in 2017. The total is even lower than in 2016, when sales hit £11.8bn in the six months following the Brexit vote. (£)
Stagecoach and Virgin Trains yesterday handed control of rail services on the East Coast Main Line to the Department of Transport, following a spate of failures on the franchise. The government will run the service until a new public-private partnership can be appointed in 2020.
The week ahead
Uber will later today begin its battle over Transport for London’s decision last September not to renew the ride-sharing app’s licence to operate in the capital. Uber is expected to outline the various reforms it has made to the business in recent months after losing its licence over concerns for public safety and security.
On Wednesday, Whitbread will report on its first-quarter earnings and the UK conglomerate’s plans for Costa Coffee will attract most attention. Earlier this year, the group announced that it will split-out the Costa high street chain and list it as a separate entity. Since the news, a number of private equity firms appear to have their eyes on the coffee company, opening the door to a potential £3bn sale.
Also on Wednesday, following an unexpectedly hawkish BoE Monetary Policy Committee meeting last week, the Bank of England will release the latest Financial Stability Report. The Bank’s most senior figures – including governor Mark Carney – will then make key policy speeches on each day for the rest of week, tackling subjects such as how to improve poor productivity growth, and UK payments regulation.
Thursday will see the eagerly anticipated EU summit in Brussels, where EU leaders will come together for a two-day meeting against a backdrop of division over migration and how to respond to Donald Trump’s administration. Thursday will also see Nike post its latest results and Walgreens Boots Alliance added to the Dow Jones Industrial Average Index.
Finally, on Friday, the latest US inflation data is published and South African retail group, Steinhoff, will post half-year results. Valued at €19bn less than three years ago, the discovery of financial irregularities six months ago means the group – which owns chains such as Poundland and Bensons for Beds – is now worth just €340m.
Polar Capital Holdings
Sutton Harbour Holdings
UK Economic Announcements
(11:00) CBI Distributive Trades Surveys
Int. Economic Announcements
(09:00) IFO Business Climate (GER)
(09:00) IFO Current Assessment (GER)
(09:00) IFO Expectations (GER)
(15:00) New Homes Sales (US)
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United Oil & Gas
Columns of Note
Looking ahead to Donald Trump’s visit to the UK next month, Kevin Pringlesuggests in The Sunday Times that the trip presents a chance for Theresa May to undertake tough – and very public – diplomacy over some of the actions of the US president’s administration, in particular the maltreatment of migrant children. (£)
Writing in The Times, Alex Massie muses that Theresa May’s decision to keep Boris Johnson in his position as foreign secretary could almost be considered cruel as even Johnson himself knows “his goose is cooked”. Writing off Johnson’s once considerable leadership hopes, Massie rates the chances of other cabinet ministers in succeeding May at Number 10. (£)
House of Commons
Education (including Topical Questions)
National Policy Statement (New Runway Capacity and Infrastructure at Airports in the South East of England) - Chris Grayling
House of Lords
Effectiveness of the Apprenticeship Levy - Lord Fox
Effect on the people of Northern Ireland on not having a functioning Executive and Assembly - Lord Dubs
Adoption of 'they' as the singular pronoun in all future legislation in preference to gendered pronouns - Lord Lucas
Value of introducing identity cards following Brexit - Lord Campbell-Savours
Orders and regulations
European Union (Definition of Treaties) (Canada Trade Agreement) Order 2018 - Motion to approve - Baroness Fairhead
No business scheduled
House of Commons
Foreign and Commonwealth Office (including Topical Questions)
Ten Minute Rule Motion
Food Advertising (Protection of Children from Targeting) - Kirstene Hair
House of Lords
Definition of anti-Semitism adopted by the International Holocaust Remembrance Alliance - Lord Leigh of Hurley
Implementation of the benefits package for communities in areas surrounding Hinkley Point C - Baroness Featherstone
Improving the performance of Border Force at UK airports and reducing delays in clearing EEA and non-EEA passengers through immigration - Lord Blunkett
Risk assessment published by Airbus of the business impact of the UK's withdrawal from the European Union - Lord Haskel
Scottish Government Debate: Defending the powers of the Scottish Parliament