News Live: Bank of England urges lenders to do more to avoid market turmoil

News Live: Bank of England urges lenders to do more to avoid market turmoil

The biennial event of an American election of national importance is upon us with the US midterms. All 435 House seats and 35 of the 100 Senate seats are on the ballot Tuesday. Joe Biden is so worried who campaigned for elections last week, ramping up the rhetoric.

The Democrats are likely to lose control of the House and the upper house is on a knife edge. That (or rather the divided government it will create) is bad news for investors, according to Rob Armstrong of Unhedged. FT Columnist Janan Ganesh blame the voters.

You want to know more? This Thursday, FT journalists Edward Luce, Rana Foroohar and James Politi will join veteran commentator Norm Ornstein in a subscriber-only event evaluating the US midterm results. Sign up for free today and you can submit questions in advance for our panel.

You can also subscribe to the Swamp Notes newsletter, which does an excellent job of investigating the intersection of money and power in American politics, and is currently free to read.

across the Atlantic, the COP27 meeting in Sharm el-Sheikh, Egypt, provides a focus for climate change news in the coming days (and weeks). More than 100 world leaders will attend, including Rishi Sunak after finding time in his diary, but not king charles.

Again, you can get more ideas of the FT. Starting Monday, FT Live will host a series of in-person, virtual and hybrid discussions with leading sustainability thinkers and senior FT journalists. Each one will complement the topics established in the presidency program for that day. Register your interest here.

Economic data

May 2023 Implied Fed Funds Rate (%) line chart showing Fed rate hike expectations jump after US inflation data.

Inflation is the main theme in economic news this week with updates to the Consumer Price Index and Producer Price Index for the US, China, Germany and Japan. Whatever the US figure, Fed Chairman Jay Powell did crystal clear in his comments last week that his team will do whatever it takes to remove inflation from the economy. The consensus is for a 0.7 percent rise in the US monthly figure to create a yearly figure of 8.1 percent.

Last Thursday’s gloomy projections from the Bank of England that the UK is entering its longest recession since world war ii sets the tone for this week’s big UK economic news: Friday’s first estimate of Q3 GDP. This is expected to show a contraction of around 0.2 percent quarter on quarter.

companies

With Sales on the street fall in the UK and there is talk of a prolonged recession, UK retail is not in a good place. But this week, it could provide a breather, and we’re not just talking about the free coffee return at Waitrose.

Marks and Spencer will report its first results under new management on Wednesday after former CEO and company veteran Steve Rowe retired over the summer. His replacement, Stuart Machin, has already put his place in terms of speeding up review of store equity and doubling down on cost-cutting efforts, so the focus is likely to be on current commerce. Last week, Rival Next maintained its full-year guidance after sales held up in early fall. M&S investors, who have not received a dividend since November 2019, expect Machin to do the same.

WHSmith’s earnings are poised for a rebound as the global travel industry recovers from Covid lockdowns. Travel revenue, much of which comes from airport stores, was already well above pre-pandemic levels in its last update in early September. Meanwhile, there was little sign of a slowdown in Dufry Airport’s duty-free group’s quarterly results last week.

The key constraint is capacity limits at major airports, in particular London Heathrow. There will no doubt be more discussion of this on Monday when Ryanair reports the first half numbers. Low-cost airlines like Ryanair are having to adapt at the end of, uh, low cost air travell, whose response has been to try to take business of the most expensive carriers.

The end of the tech earnings news season is likely to continue the gloomy mood. Lyft, reporting Monday, announced last week major job cuts, his second round of layoffs in recent months. Lyft isn’t alone among tech firms having to tighten their belts, but it doesn’t look good for the ride-sharing service, a smaller rival to Uber, which is also selling its car services business.

Elsewhere, we have a handful of updates from drugmakers. BioNTech, reporting Monday, is among several Covid-19 vaccine makers that have started raising the price of their injections amid concerns about drop in demand in 2023. Airfinity, a health data analytics group, forecasts Covid vaccine sales to fall by about a fifth to $47 billion next year. AstraZeneca is also concerned, which reveals figures for the third quarter this Thursday, after the nasal version of its vaccine against Covid failed tests. better news is expected from the German group of drugs and chemical products Bayer, whose figures will be known on Tuesday.

Read next week’s full schedule here.

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