Week Ahead (6 June)

Monday, 6 June – Boris Johnson to face confidence vote

The British Prime Minister, Boris Johnson will face a vote of confidence in his leadership of the Conservative Party on Monday evening, as the threshold of 54 letters of no confidence has been reached.

To survive the confidence vote, Johnson will need the backing of 180 of his party’s MPs. This scenario appears the most likely at the moment, despite an increasing number of his party MPs, including former close allies, calling him out for lack of moral leadership, following the Partygate scandal revelations.

Johnson’s allies and loyalists have pointed out that there is no clear succession plan, warning against any risks of weakening the Tory party ahead of the next elections. Meanwhile, a recent poll published on Sunday put Labour 20 points ahead in Wakefield, one of the two constituencies to hold by-elections on 23 June.

Thursday, 9 June - ECB Governing Council meeting to be held

The Governing Council of the European Central Bank will hold its regular monetary policy meeting on Thursday in Amsterdam.

While the ECB President Christine Lagarde and its Chief Economist, Philip Lane, have provided clear guidance for a 25 basis point rate hike in July, the Governors of the Central Banks of Austria, Lithuania, Latvia, the Netherlands, and Slovakia have all publicly indicated that a 50 basis point hike would be more appropriate.

Another possibility, albeit remote, is that the Governing Council delivers a hawkish surprise this week by raising rates before the conclusion of bond purchases in July. So far, only Austrian Governor Robert Holzmann has proposed this and there is unlikely to be sufficient support for this.

Thursday, 9 June - Irish statistical releases to show pressures facing Irish economy

The Irish Consumer Price Index will be released this Thursday and is likely to show the continuing upward spiral of price pressures faced by Irish citizens in various areas of the economy. April's statistics showed that prices had risen by 7% on average on the same period last year and almost a full percentage point between March and April this year. The main factors influencing the price rises recorded were Transport (+18.9%), Housing, Water, Electricity, Gas & Other Fuels (+17.1%), Alcoholic Beverages & Tobacco (+5.1%) and Communications (+5.1%).

Data on the numbers of Ukrainian refugees to have arrived in the state since the beginning of Russia's invasion will also be released on Friday. While widely supported, the influx of refugees has shone a further light on difficult societal issues faced by citizens and residents of Ireland, particularly in accessing housing and health care.

The data releases may put further pressure on the coalition government – a poll released last week showed for the first time that support for Sinn Fein exceeds the combined support of Fianna Fail and Fine Gael.

Thursday, 9 June - Proposed amendments to AML directive to be submitted to ECON/LIBE committees

Members of the ECON and LIBE committees must submit any proposed amendments to the sixth directive on anti-money laundering rules by this Thursday. MEPs from the committees discussed the directive last Thursday following the publication of their report on 6AMLD; the Commission proposed the new directive on 21 July 2021. Co-rapporteurs Paul Tang (S&D) and Ludek Niedermayer (EPP) have targeted strengthened supervisory capacity and an enhanced role for the proposed Anti-Money Laundering Authority.

In its discussions last Thursday Tang said that the changes proposed in the joint report would allow Europe to "trace the patterns of money laundering. Across the political groupings represented on the committees, opinion was largely positive towards the co-rapporteurs report, with Renew and the Greens particularly in favour of its contents.

Following receipt of amendments this week the joint committees will arrange a voting session, although it is understood that this will not take place before the summer recess.

Thursday, 9 June - Council of the EU to adopt its approach on the proposal to amend the Consumer Credit Directive

On Thursday 9 June, the Council of the EU is expected to adopt its general approach to the proposed amended version of the Consumer Credit Directive. The revised version is an adaptation of the directive to the digital age, by expanding its scope to include BNPL schemes, payday loans, short-term overdrafts, and interest-free credits. Among the proposed changes are the introduction of pricing rules and the standardisation of information requirements for digital lenders.

The proposal reflects the Commission’s growing awareness of the rise in digital lenders and the increased online distribution of Consumer Credit, indicating its willingness to fill this regulatory vacuum.

Friday, 10 June – The Bank of England/Ipsos inflation attitudes survey to be published

On Friday 10 June, the findings of the quarterly survey on inflation attitudes will be published by the Bank of England and the polling company Ipsos. In the previous survey, published in February, inflation expectations among the British people reached the highest since 2008. In April, Consumer Prices Index (CPI) rose by 9.0% in the last 12 months, the highest rise since records began in 1989.

The UK is currently facing soaring energy bills and the worst cost of living crisis since the 1950s, while its political leadership is facing challenges on multiple fronts and a no-confidence vote this Monday, following the series of revelations over the so-called Partygate scandal.