The week begins against the backdrop of Covid-19 restrictions and warnings that more are on the way. With one-fifth of the UK already living under tighter local controls, health secretary Matt Hancock warned at the weekend that the country was at a “tipping point” and said new national restrictions would be needed “if that’s what’s necessary” to control the virus.
Boris Johnson, the prime minister, earlier announced fines of up to £10,000 for those who break self-isolation rules and Sadiq Khan, London mayor, has put the capital on alert for further restrictions.
There has been growing dissatisfaction with Mr Johnson’s leadership, some from within his own party, but the Labour party still trails the Conservatives in the polls and this will be something the opposition party will be seeking to address at its annual conference, which is being held online for the first time this week due to the pandemic.
Italy has regional elections that will test the country’s “red wall” as well as a referendum on reducing the number of MPs.
The main economic data point of the week will be flash purchasing managers’ indices (PMIs) from the eurozone and UK, which will help to gauge the speed of the economic recovery from the damage done by coronavirus.
The People’s Bank of China heads a very busy week of central bank meetings around the globe, but most are expected to keep rates on hold at already low levels or to cut further.
On the corporate diary, Tesla’s Battery Day will be the event to look out for, with the electric car maker expected to reveal some significant developments.
This week the new leader of the UK’s Labour party, Keir Starmer, will set out his stall at the annual Labour conference, being held online because of coronavirus restrictions.
Shadow chancellor Anneliese Dodds will address conference online on Monday and Sir Keir’s speech will round off the event on Tuesday.
Rachel Reeves, shadow cabinet office minister, says that the Labour party is going into conference season under new management and with an apparently prosaic but vital mission — to persuade voters it can be “trusted running the economy”.
Other items up for discussion include a new race equality strategy, criminal justice reform, the future of the NHS, the economic impact of coronavirus on younger generations and Labour’s plan for a green recovery.
Italy’s ruling Democratic party (PD) goes into the week facing a watershed moment as it contemplates losing control of Tuscany, a region seen as one of the spiritual homes of the Italian left, to Matteo Salvini’s anti-immigration League.
The two-day poll closes on Monday in seven of Italy’s regions, of which the left controls four. The PD is girding itself for possible defeat in the central region of Marche and in Puglia in the south, although polls suggest it will hold on in Campania, home to Italy’s third-largest city, Naples.
At the same time, there is also a referendum on a plan to cut the number of MPs from 945 to 600 from the next election. The reform is expected to pass, despite many MPs campaigning against the move.
Elsewhere . . .
EU Commission president Ursula von der Leyen is set to unveil a new pact on migration and asylum on Wednesday
EU leaders meet in Brussels on Thursday and Friday to discuss external relations with Turkey, Belarus and China
World leaders will gather online for the 75th session of the UN General Assembly, with a high-level debate on Wednesday to discuss how to tackle coronavirus
Companies news and earnings
Elon Musk is scheduled to showcase new technology at Tesla’s Battery Day on Tuesday. Analysts have been told to expect significant improvements on the cost range and duration of batteries, which will make them superior to internal combustion vehicles.
The public event will follow the electric car maker’s annual stockholder meeting the same day.
The hearing on Tiffany’s request to fast-track its lawsuit seeking to hold French luxury goods giant LVMH to its proposed $16bn takeover of the US jeweller is set for Monday.
Earnings reports are still in the mid-season lull, but there are still a few companies for investors to keep an eye on this week with the usual focus on demand and supply chain issues for retailers.
The popularity of DIY projects during lockdown is likely to mean an increase in earnings for retailer Kingfisher, which updates on Tuesday.
Strong demand for frozen foods, alcohol, sporting goods and electronics is expected to boost profits and earnings at US bulk retailer Costco Wholesale on Thursday.
Food manufacturer General Mills is likely to see a rise in first-quarter earnings on Wednesday, while slower store traffic will weigh on sportswear maker Nike when it reports on Tuesday.
Others reporting this week include food outlets operator SSP Group, consumer goods group PZ Cussons, water provider United Utilities and water and waste group Pennon.
Investors will look for clarity on the Bank of England’s position on cutting interest rates below zero when governor Andrew Bailey speaks at the British Chambers of Commerce’s online conference on Tuesday.
Sterling dropped and UK government bond prices pushed higher last week after traders spotted signs that the bank might be seriously considering cutting rates further.
The BoE kept its quantitative-easing programme and key interest rate unchanged at 0.1 per cent at its last meeting in line with expectations, but has said that it will begin “structured engagement” on operational considerations for negative rates with the Prudential Regulation Authority in the last quarter of the year.
US Federal Reserve chair Jay Powell is set face questions on the economic fallout from the pandemic and the fiscal stimulus when he testifies before congressional committees on Tuesday, Wednesday and Thursday.
Meetings wise, the People’s Bank of China will announce policy on Monday, when no changes to the one-year loan prime rate are forecast.
Mexico’s central bank meets on Thursday when it is set to lower rates to 4.25 per cent — its 11th cut in a row.
The consensus forecast is for Colombia to cut rates to 2 per cent on Friday, though some analysts point to an even deeper cut.
Turkey’s central bank meets on Thursday when it is expected to keep its one-week repo rate steady at 8.25 per cent, despite the lira hitting record lows recently.
Sweden is set to stick at zero on Tuesday, as will Norway on Thursday and Switzerland is expected to stay in negative territory at minus 0.75 per cent the same day
New Zealand, the Czech Republic and Thailand are all likely to keep rates at 0.25 per cent when they meet on Wednesday.
Flash PMIs from the eurozone, Germany, France and the UK will be in focus on Wednesday.
The UK surveys are expected to slide back after some better figures in August as the number of new Covid-19 cases and the likelihood of more restrictions weighs on the outlook.
Eurozone PMIs are forecast to remain steady with the rise in coronavirus numbers balanced against better readings from some countries, especially after the August readings for manufacturing and services both disappointed.
US jobless claims on Thursday are forecast to show a slight fall, down to 845,000 for the week ending September 14, from 860,000 the week before.
Taiwan has export orders data on Monday and Germany’s Ifo survey is due on Thursday.