Your Sunday UK Briefing: Sunak Declares as Johnson Seeks Support

Your Sunday UK Briefing: Sunak Declares as Johnson Seeks Support

23 Oct    Finance News, Physics

Follow us at @BloombergUK and on Facebook, and wrap up your day with The Readout newsletter with Allegra Stratton.

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(Bloomberg) —

The big comeback: The UK will get another new prime minister this week after the resignation of Liz Truss. So far the frontrunner is Rishi Sunak, the ex-chancellor who lost his bid for leadership against Truss just last month. He might end up in a runoff against his former boss Boris Johnson or Penny Mordaunt, who are both scrambling secure the backing of 100 MPs needed to get on the ballot paper. Either way the race might be over as soon as Monday.

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The big market thought: In the wake of UK market turmoil, European pension funds are rethinking allocations, putting everything from PE to property at risk, Anchalee Worrachate writes. The volatility left pension pots nursing heavy mark-to-market losses, forcing them to unload everything from government bonds to securitized debt. That’s spurring a rethink for European retirement funds after they amassed illiquid assets in the cheap money era, according to PensionsEurope.

See also  UK banks ramp up lending after Covid-19 support cliff edge

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The big earnings: Credit Suisse will announce a major overhaul on Thursday. How it will finance the reshaping that it hopes will win back investors’ confidence — and what that figure is — is the biggest of many unknowns hanging over the bank. UBS, Deutsche Bank and Barclays also report with expectations high for fixed income trading, though a slowdown in dealmaking may weigh on advisory fees. Outside of finance, Volkswagen will cap off the week, as analysts ponder whether its profit guidance can withstand supply-chain headwinds.

The big stat: Manufacturing may show a further contraction in October with UK composite PMI likely to fall to 48 from 49.1 in September, according to Bloomberg Economics. The incoming premier will struggle to craft a plan to rescue the UK from the recession it may already be in or its longer-term limits, no matter what’s said on the campaign trail.The big opinion: Truss’s short stint as leader could have repercussions on the Tory party for years, Martin Ivens writes for Bloomberg Opinion. As a former Goldman Sachs banker, Sunak will be accused of plotting to sell out his party and country to international financiers, intent on building “Davos-on-Thames.” Although a Brexiteer, he will be charged with “appeasing” Europe, too, if he seeks a necessary accommodation on trade with Brussels. 

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ICYM our Big Take: For years, US lawmakers have attempted to crack down on assault weapons blamed for tragedies like the Sandy Hook Elementary School shooting. But as Jason Grotto and Michael Smith discover, there are more gun manufacturers than ever, including those making AR-15-style assault rifles that outmaneuver regulators. 

See also  New Zealand immigration hits an all-time high as movement surges following pandemic lull

And finally, with the COP27 summit kicking off next month, get primed with the Switched On podcast, which takes a look at how some countries in Africa could tap low-carbon technologies to expanding their energy systems as electricity demand rises. At Gold Field’s giant mine in South Africa, managers are adopting some of Toyota’s just-in-time concepts to improve efficiency.Have a good week. See you on the other side.

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