Week Ahead (8 August)
W/C Monday, 8 August – Voting for new Conservative party leader resumes, following delay over cyber-security concerns
Voting for the new Conservative party leader resumes this week, as all postal ballots are due to be sent out today to nearly 160,000 party members after their delivery was initially delayed over cyber-security concerns.
Truss has emerged as the leading candidate, with a 34-point lead over Sunak, according to last week’s major poll. Former chancellor Sajid Javid has been the latest high-profile Conservative party member to endorse Truss’ bid, following Defence Secretary Ben Wallace and former leadership candidates, Chancellor Nadhim Zahawi and Penny Mordaunt.
Meanwhile, fears that the UK is heading towards a protracted recession are growing. As it raised interest rates for the sixth consecutive time last Thursday, the Bank of England (BoE) forecasted inflation to peak at 13.3% in October, well above the previously predicted 11%. The BoE opted for a 50-basis point hike in August, constituting the UK’s biggest single increase in interest rates for nearly 30 years.
Consequently, the economy and the ongoing cost-of-living crisis has been the most contested topic so far. Truss is campaigning on a tax-cutting platform, including cuts to corporation taxes, and has flagged her intention to examine the Bank of England's mandate for setting interest rates. Emphasising the need to tackle inflation, Sunak has warned against saddling the next generations with debts, in reference to Truss’ plans to cut more than £30 billion worth of taxes. However, in response to Truss’ growing lead among party members, he has since pledged to cut the basic rate of income tax to 16% from 20%.
W/C Monday, 8 August – Industrial production figures for EU member states to be released
The industrial production figures for June, are expected to come out this week in several EU member states, including Eurozone members Ireland, Finland, Slovakia, Slovenia, Luxembourg, and Greece. This will follow last Friday’s release of the same figures for Germany, France, Italy, and Spain, the Eurozone’s largest economies. In Germany, industrial production unexpectedly rose by 0.4% in June, compared to May, despite predictions for a –0.3% decrease. France and Spain also presented stronger than expected gains in June, with a 1.2% and 1.1% surge in industrial outputs respectively.
Last month, it was announced that industrial production in the 19 countries of the Eurozone area increased by more than expected in May, rising by 0.8% month-on-month and by 1.6% from May 2021. Nevertheless, production recovery is still at risk as supply chain risks persist and the eurozone economy is slowing rapidly amid growing inflation.
W/C Monday, 8 August - CSO to release data on consumer prices and residential property prices
The Central Statistics Office will release data next week showing the latest trends in consumer pricing and residential house prices in Ireland.
The Consumer Price Index data will be released on Thursday, covering the situation through July. June's Consumer Price Index data release revealed that prices were 9.1% higher than during June 2021, with notable jumps in prices for housing, water, electricity, gas and other fuels (up 22.5%), transport (up 20.4%), alcohol and tobacco (up 8.2%) and restaurants and hotels (up 7%). It is unlikely that results for July will buck the upward trend in prices.
Residential house price data will be released this Friday, reflecting the situation in June. May's release showed that prices for houses and apartments in Ireland had risen by 14.4% across the country when compared to May 2021.
The data release may put more pressure on the Irish government to take action to alleviate inflationary pressures in both consumer pricing and housing, particularly given the release of Exchequer figures last week which show that the government took in a €5 billion surplus in taxes in the seven months to July.
Monday, 8 August - EFRAG consultation on Corporate Sustainability Reporting Standards to conclude
The deadline for submission to a European Financial Reporting Advisory Group (EFRAG) consultation on a Commission proposal for a Corporate Sustainability Reporting Directive (CSRD) passes today.
It is anticipated that the draft European Sustainability Reporting Standards (ESRS) will be sent to the Commission by November at the latest, following which a further consultation will be held. The current consultation includes five "exposure drafts", or early versions of proposals, covering issues including the environment, social impacts, and governance.