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(Bloomberg) —
Well hello again. Here’s what we’re talking about heading into the new week.
The big data: UK inflation will probably fall out of double digits for the first time in seven months when March figures are posted on Wednesday. More to the point, wage data may show the pace of increases slowed in the latest quarter. Together, economists expect those reports to build the case for the Bank of England to bring to an end its quickest series of rate hikes in three decades. BOE policymaker Silvana Tenreyro spoke Friday of the need for patience as the impact of rate hikes shows up with a lag. Remarks by rate setters Jon Cunliffe on Monday and Catherine Mann on Wednesday will be watched for new clues.
The big strikes: You can’t win ’em all. Rishi Sunak’s bid to end a series of damaging strikes was dealt a major blow on Friday when nurses rejected the government’s latest pay offer and announced more walkouts. The developments bode ill for the Tories in council elections due in May. Elsewhere, more than 500 Amazon Coventry workers were set to start a three-day strike on Sunday.
The big idea: Sunak is thinking about cutting the UK’s inheritance tax ahead of the next general election, Alex Wickham reports, although it’s unclear when any proposals will come to light. The idea may be floated in Chancellor Jeremy Hunt’s fall fiscal statement, giving the Tories all summer to do some polling on the subject. A more immediate problem for the PM: new bullying claims centered on former business secretary Alok Sharma.
The big comeback: Who doesn’t love an underdog? Betting against the pound is so 2022, says Alice Gledhill, explaining that the bleak, Truss-era assessments of the currency were overstated. The pound has delivered the best performance of any major developed currency so far this year, and bullish strategists are starting to pile on board.
The big buyouts: The cash-strapped BBC is looking to trim its payroll and has sent voluntary redundancy letters to some of its best-known news presenters, the Daily Mail reports. Among those being offered the opportunity to hang up their mics are Huw Edwards, Reeta Chakrabarti and Sophie Raworth. The recipients had until Friday to raise their hands — yet the meager caps on BBC redundancy payments make the offers look pretty uninviting.
The big meeting: Foreign Secretary James Cleverly will be the UK’s representative when Group of Seven foreign ministers gather in Japan’s mountain resort of Karuizawa, northwest of Tokyo. The US is pressing the need for G-7 allies to coordinate against economic coercion, not just military threats, as Japan hosts top diplomats from the world’s wealthy nations amid heightened tensions with China. Concerns over Taiwan are a major focus after China again held military drills around the island. The big earnings: Europe’s earnings season gets into full swing in the coming week. On Tuesday, EasyJet’s first-half update could show how travelers have been trading down to the budget carrier during the cost of living squeeze. Heineken, ASML, L’Oreal, Nokia and SAP are among others scheduled to report. Investors will be watching for signs of a slowdown and how companies are coping with headwinds such as higher rates and banking system stress. Consensus expects Stoxx 600 earnings-per-share to drop 2.4% this year, according to data compiled by Bloomberg Intelligence.
The big spenders: While retailing remains mostly a low-margin grind shadowed by cost-of-living worries, the luxury sector is powering ahead, with France’s LVMH and Hermes shares pointing skyward as Chinese buyers shake off the Covid years and renew their affection for pricey handbags, scarves and shoes. Both companies have annual general meetings in the coming week that could offer new talking points. ICYM Our Big Take: Check out our deep-dive into how the fractured US-Saudi oil pact opens up a can of worms for the world economy, including the potential for higher inflation for longer and the associated risks of recession. Ziad Daoud and Courtney McBride explain how the Saudi-Russia oil alliance may set the path of oil prices for years. And finally, Bloomberg’s Felix Gillette joins the Big Take podcast to explain how, as its 50th anniversary approaches there’s a quest to make Hasbro’s venerable Dungeons and Dragons not just popular but actually profitable, and move the tabletop favorite into the digital age.
Have a great week and we’ll see you on the other side.
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