UK set to suspend parliament, Apple launches new iPhone

Here are just some
of the stories the Financial Times will be
watching in the week ahead. The UK parliament is
set to be suspended for five weeks in what could
be another tumultuous week in Westminster. Apple launches its latest
iPhone in Silicon Valley. We’ve got economic
data out of the US. And markets expect the
European Central Bank to cut interest rates. First, to Westminster, where
the coming week in UK politics promises to be just as
turbulent as the one it follows. The confrontation between
Boris Johnson and parliament shows no signs of abating. The new prime
minister has managed to secure a suspension
of parliament, starting on Tuesday,
but he hasn’t managed to block a bill to
prevent a no-deal Brexit. And that’s led him to fire more
than a score of his own MPs, including veterans, such as Ken
Clarke and Sir Nicholas Soames, while his brother
Jo Johnson resigns. The prime minister
had been planning to call a general election
and fight a populist campaign. Over the next few
days we’ll be watching to see how much the
opposition parties can unite to continue to not only block
a no-deal Brexit which, so far, they’ve been quite
successful in trying to do in the House of
Commons, but also to stop Boris Johnson holding a
snap general election. This is what he would
very much like to do, but it looks as if we’re
going to see an election a bit later in the autumn. That’s one thing
to look out for. The other is that it’s emerging
in court papers in the UK that the Johnson
government would like to see a very
different final relationship between a post Brexit Britain
and the rest of the EU. They’re looking for a free
trade arrangement, not regulatory alignment
with a single market. There will be a lot of pressure
on them to explain their plans. Now, Apple will unveil its
latest iPhones this week in Silicon Valley. The 13th iteration is expected
to come in a new iPhone Pro model that features a new third
camera lens on the reverse and wireless charging
capabilities. But despite the introduction
of new colours and finishes, the overall look of the latest
iPhones will be broadly similar to the iPhone 10. While there’s always a chance
Apple surprises with a brand new product, the
odds of it unveiling new smart glasses
or an autonomous car seem slim this time around. Many iPhone owners are
holding onto their handsets for far longer
than they used to, seeing little in the
latest releases that will encourage them to upgrade. All of this coupled with a
declining smartphone market puts extra pressure on
Apple to impress this week. Rivals such as Huawei,
Google, and OnePlus are producing really high
quality Android devices that are testing iPhone
owners’ longstanding loyalty. Samsung is relaunching
its folding phone, which is pioneering
a whole new category. And the iPhone is looking like
it will be the only flagship smartphone without the option
of 5G connectivity this year. One of the strongest
messages that Apple has used to make itself stand
out from the competition is privacy, but even
that has been threatened by recent revelations
that iPhone owners were vulnerable to a hacking attack
for more than two years. All this means that
we will have to wait until next year
for a bigger leap forward in iPhone innovation. So Tim Cook and his
team have a lot of work to do this week to whip
up the usual iPhone hype. With markets widely
expecting a 25 basis point rate cut from the US Federal
Reserve in September, economic data leading
up to the meeting are expected to face
closer scrutiny. Consumer prices on
Thursday are expected to have climbed 0.1 per cent
month on month in August. Investors will also
scrutinise retail sales for signs of cooling consumer
spending, a major driver of economic growth in the US. Retail sales are forecast to
have increased 0.3 per cent month on month in August. American consumers have remained
resilient despite recent trade uncertainty, but
concerns are mounting that they may begin
to retrench spending amid fears over the
outlook on trade and slowing domestic growth. Investors will closely watch
August retail sales figures out next week for an update on
the health of the US consumer. Inflation readings
are also on the radar, drawing attention to consumer
and producer prices as well. Sluggish inflation has proved
a conundrum for the Federal Reserve that has
previously noted the difficulty of reaching its
2 per cent inflation target. This further complicates
the task of the Fed, which has faced growing pressure
from Donald Trump and markets to lower interest rates
and support growth amid the ongoing
trade turbulence and as market
indicators have begun flashing recession warnings. And finally to Frankfurt,
where Mario Draghi is this week expected to go out with
a bang as the president of the European Central Bank. The question that
matters for investors is how big his bazooka will
be before he hands over to Christine Lagarde
at the end of October. On Thursday, markets expect him
to cut eurozone interest rates further into negative
territory and to restart the ECB’s quantitative easing. There are dissenting voices. We’ve already heard from the
heads of the German, Dutch, and French central banks,
that they aren’t sure that restarting the QE programme
is the right thing to do. But given how bond markets
have anticipated this move and sovereign bond yields have
fallen, prices have risen. Ahead of the meeting this week
one thing’s for sure is that if the ECB does not
restart the QE programme, we’re likely to see a sell-off
in those sovereign debt markets. And that’s what the week ahead
looks like from the Financial Times in London.

Maurice Vega

9 Responses

  1. And finally we find out – it's a NORMAL THING. Everything they said about it being unprecedented. All lies. Everybody prorogues all the time, John Major did it twice. Villains. Now Scottish Judge says it's illegal – so will John Major be facing prison?

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