CZECHIA: Sikela Sees Windfall Tax as One-Time Measure
Aug-17 06:45
- Yesterday, Czech Industry and Trade Minister Jozef Sikela says a windfall tax on some industries may be one of possible ways to finance programs designed to help people cope with rising energy costs (BBG).
- CNB Zamrazilova mentioned in an interview (Seznam) that she sees weakening domestic Czech price drivers.
- Zamrazilova considers FX interventions as a legitimate policy tool.
- Economic data showed yesterday that PPI inflation decelerated to 26.8% in July (vs. 27.7% exp.), down from 28.5% expected.
- There are no important economic data coming out today.
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UK: Week Ahead (4/4)
Jul-18 06:44
Against his backdrop, the race for the next Prime Minister will enter a crucial next phase. Today will see the final five candidates in the Conservative leadership contest (Mordaunt, Sunak, Truss, Badenoch and Tugendhat) whittled down to the final four (results expected around 20:00BST / 21:00CET).
- Further votes will be held in coming days with one candidate eliminated in each round before the final two candidates will be put before Conservative party members. The final two candidates are due to be finalised by Thursday at the latest, but if votes are held on consecutive days, we will get to the final two by Wednesday.
- Note that if any candidate receives 120 votes at any round, they will automatically progress to the final two.
- Penny Mordaunt is now odds on favourite to be the next Prime Minister, having overtaken Sunak following a YouGov poll of Conservative party members which showed Sunak losing to the remaining candidates in the membership vote.
- However, a JL Partners poll of Conservative voters (note: not party members) saw the highest proportion having a favourable view of Sunak as the next PM with 48% saying he would be a good PM vs 39% for Truss and 33% for Mordaunt. This suggests that the race is far from over.
- Today will also see a vote of no confidence in the government, but there is little chance it will pass. Results are expected at 22:00BST / 23:00CET.
UK: Week Ahead (3/4)
Jul-18 06:39
- We have three scheduled MPC speakers this week. On Monday Saunders is due to speak on monetary policy “past, present and future” at the Resolution Foundation. Tuesday will see Governor Bailey deliver his Mansion House address – which will be watched for any signalling of intent ahead of the August MPC meeting (which will also see a speech from Chancellor Zahawi). Thursday will then see BOE Chief Economist Huw Pill give introductory remarks at a joint Kings College / BOE / ECB conference on macroeconomic policy analytics. Pill’s speech is likely to be more academic in nature.
- In addition, we will have the ECB meeting this week, which will have potential knock-on effects to UK markets.
UK: Week Ahead (2/3)
Jul-18 06:35
- The upcoming week will be huge for UK data. We will see labour market data on Tuesday, then on Wednesday we will receive CPI/RPI/PPI data for June, public finance data on Thursday and Friday will see GfK consumer confidence, retail sales and flash PMI data all due for release.
- The most notable of these releases will be inflation data which is expected to increase from the May release of 9.1%Y/Y with the Bloomberg median at 9.3%Y/Y (with some downside risks). However, core CPI is expected to slip back slightly from 5.9%Y/Y to 5.8%Y/Y according to consensus (with more balanced risks). If consensus forecasts are realised, we would see headline CPI move to a new cycle high but the second consecutive fall in core CPI.
- Labour market data continues to be closely watched, particularly wage data, with the proportion of passthrough from higher inflation to higher wage growth still highly uncertain.
- Retail sales ex-fuel data has only seen one positive M/M print since October 2021’s print and this trend is expected to continue with the June print.
- Consensus looks for further consolidation in the PMI data – the manufacturing print is expected to be 52.0 (which would be the lowest print since June 2020) while the services print is expected at 53.1 (the weakest since February 2021).
