Putin set for 6 more years, UK Spring Statement
The FT's Daniel Garrahan previews some of the big stories in the week ahead, including Russia's presidential elections; the UK's new-look Spring Statement, Inditex's full-year results and US CPI data
Filmed by Rod Fitzgerald and Nicola Stansfield. Produced by Daniel Garrahan
Hello, and welcome to The Week Ahead from the Financial Times in London. Here are some of the big stories we'll be watching this week. Putin's set for another six years in office as Russia holds presidential elections. UK Chancellor Philip Hammond delivers a new look Spring Statement. The Spanish retail group behind Zara reports full-year results. And there's CPI data out of the US.
First to Russia, where Vladimir Putin is set to win another six-year term in presidential elections on Sunday. There are some signs of discontent with the pro-Kremlin Russian Public Opinion Research Centre registering a dip in support for Putin in both Moscow and St Petersburg to 57% last month. But it looks like the authorities main focus will be securing a turnout high enough to make the vote convincing, as our Moscow bureau chief Kathrin Hille explains.
To drive up turnout, civil servants, state company employees, public housing residents, and students are being pressured to come. Alexei Navalny, Mr Putin's only serious challenger, is excluded. Eight candidates have been registered to make things more interesting and legitimate. But as pollsters working with the Kremlin say, more than 80% of those planning to go intend to vote for Mr Putin, the result is a foregone conclusion.
Now to the UK, where Chancellor Philip Hammond will deliver a slimmed down Spring Statement to the House of Commons this week. The new look address will be nothing like the traditional spring Budget, which has been moved to the autumn. That means no photo opportunity with Mr Hammond holding up the famous red box, and a speech which could be as short as 15 or 20 minutes. And it's no longer a major fiscal event, that means no new public spending, or tax measures, or indeed, any other policies that could change the overall Budget. But we will get updates on the public finances, the UK economy, and the Brexit bill. Our economics editor Chris Giles reports.
We've had some very good news on productivity in the last two quarters, but I think it's far too early for the Office for Budget Responsibility, the independent watchdog that produces the forecasts, to say that this is going to be continued into the future. On the other hand, the public finances have been quite a lot better. And the third thing is we're going to get some more detail on the bill for leaving the EU, not just how big it is - we sort of know that at about just a little bit around GBP 40 billion, but also, when is Britain likely to have to pay this. And I think that will be the news out of this that we will be paying - not a huge amount every year - but paying money 30 years or so into the future for things like pensions of former officials who worked at the European Commission.
Now, is the relentlessly strong performance of Spanish retail company Inditex about to come to an end? The owner of Zara has hardly put a foot wrong since it floated on the Madrid stock market in 2001. But analysts are worried about the effects of the strong euro against the dollar, and the recent warm autumn. Inditex's shares fell 7% in a single day last month. And shares are down 21% over the past year. So what will investors be looking for when the group reports full-year results this week? Here's our Madrid correspondent Michael Stothard.
Inditex is the world's largest fashion company by sales. It is the envy of all its peers. It has unbelievably strong margins. It's a pioneer of the fast fashion model. But it may have hit a slight road bump this quarter thanks to the strong euro, and also some warm weather last August. Shares fell a sharp 7% in one day last month after a series of analysts' notes warned about this. Now this may be a case of the company steering down analyst estimates so they can beat expectations on the day, but investors will be hoping this is not something more structural to worry about like long-term weakening margins.
And finally, to the US where inflation and wage growth have been the crucial missing pieces in the US economic recovery. Three interest rate rises have been pencilled in for this year. The Federal Reserve chair, Jay Powell, has struck a bullish note on the outlook for the US economy. That's raised speculation that policymakers may accelerate the pace of rate tightening. To get a better sense of how the Fed may vote this month, markets will keep a close eye on Tuesday's consumer price reports, as our US reporter Mamta Badkar explains.
Data are expected to show that both headline and core consumer prices cooled in February on a month-on-month basis. On a yearly basis however, core CPI is expected to remain unchanged at 1.8%, though headline CPI is expected to come in at 2.2%. The Fed has an inflation goal of 2%. Now new Fed chair Jay Powell has possibly signalled more aggressive rate rises in 2018. However, Fed officials will now have to weigh price pressures against the risk of a potential trade war, and the impact that that could have both on US economic growth and inflation.
That's what the Week Ahead looks like from the Financial Times in London. See you again next time.