BoE rate decision, Apple reports third-quarter earnings
Aimee Keane highlights some of the big stories the FT is watching in the week ahead, including the Bank of England's interest rate-setting announcement, Apple's earnings and the latest economic data out of Germany.
Produced by Gregory Bobillot and Aimee Keane.
Welcome to The Week Ahead. Here are the stories we'll be watching in the next few days. The Bank of England will meet on Thursday to decide whether or not to raise borrowing costs. Apple reports third quarter earnings. And will German manufacturing and trade data back up the booming business sentiment about the health of the economy?
We'll start with the Bank of England. On Thursday, members of the Central Bank's Monetary Policy Committee are set to announce whether or not they'll move on interest rates and if they're going to make any changes to their asset purchase programme. The bank is also expected to publish updated forecasts on economic growth and inflation. Our economics correspondent Gemma Tetlow has more from the London newsroom.
On Thursday, the Bank of England will announce the latest decisions on interest rates and their asset purchase scheme. All bets really are that they probably won't change policy this week, because recent weak economic data has undermined some of the more hawkish statements that some members of the committee were making at the end of June. In their last meeting in June, there was a surprisingly close 5-3 vote in favour of staying put, but three members did think that interest rates should be increased. However, with GDP in the second quarter now looking to have been just 0.3% and inflation having come down from the peak reached in May suggests that banks will probably stay put at the moment.
Now to Apple. The iPhone maker reports third quarter earnings on Tuesday, giving investors a peek inside the Cupertino, California-based company's performance. Apple's fiscal third quarter is usually more about the outlook than it is about past performance as the company readies for the release of the next iPhone later in the year. Wall Street expects slight growth in iPhone sales to 41 million units for the three months that ended in June, with revenues of around $45 million and earnings per share of $1.57. Tim Bradshaw covers Apple for the FT and has more from San Francisco.
Usually for Apple, the June quarter, its fiscal third quarter, is kind of a boring one. It's the last period before we get to see what the new iPhone looks like and it's usually when sales of the most recent model that was announced the previous year start to tail off before the September announcement of the next model. There will be a new iPhone in September, and it will have many advanced new features, such as an OLED screen and an augmented reality camera, possibly even wireless charging. But all of that seems to be sounding as though it's making it much more complicated to make, and the noises coming out of Apple's supply chain are that there will be a delay to the launch of the-- at least one of the models of the new iPhone that we're expecting to see in September.
Analysts will be peppering Tim Cook, Apple's chief executive, with questions trying to figure out exactly when this new iPhone will arrive and also how much it will cost. There is an expectation that these new advanced features could mean it costs up to $1,000 or more, which would be much more than any of the previous models that we've seen so far and that changes, to some extent, the importance of that unit sales figure and makes it much more about the overall revenues and the average selling price of the next iPhone. So it's going to be a rather more complicated Apple earnings call than we've had for some time.
Moving to Germany now. The Eurozone's largest economy is booming, at least as far as its corporate sector is concerned. Economic sentiment has hit record highs recently, but market watchers will closely watch numbers released by the Federal Statistics Authority this week to see if that business sentiment can be backed up by hard numbers. Here's Claire Jones, the FT's Frankfurt Bureau Chief, with more.
The German economy seems to be doing really, really well. Last week, we saw the release of a very important indicator of business confidence. It's called the Ifo index and it's from the Munich-based think tank of the same name. What that indicators showed was that businesses believe they've never had it so good here in Germany. Not only are current economic conditions very strong, companies also expect those conditions to remain strong in the months ahead.
That's pretty impressive for an economy that's been doing well for a few years now. But the question remains about whether that confidence will be backed up by actual hard data. What we're set to see this week are figures not only for foreign trade, but also for manufacturing. They're two massively important areas for the German economy, so it'll be interested to see what they say.
And that's what the week ahead looks like from the FT in New York.