UK: Focus on the Conservative Party Conference - Danske Bank

Among the relevant events scheduled for next week in the UK is the Conservative Party Conference. Analysts from Danske Bank expect PM Theresa May to deliver a speech on Brexit underlining that the UK is leaving the single market and the customs union.

Key Quotes: 

“In the UK, focus is on the UK Conservative Party Conference in Manchester on 1-4 October. The Conservative Party (not only backbenchers but also Cabinet members) remains hugely divided on Brexit and PM Theresa May’s position has been clearly weakened since the general election in June, although it is difficult to see a leadership contest in the short run due to the ongoing Brexit negotiations (which are difficult enough as they are) and no obvious successor. PM Theresa May is expected to deliver a speech on Brexit in connection with the conference, where she is expected to repeat that the UK is leaving the single market and the customs union.”

“In terms of economic data releases, we are due to get the September PMIs, which will give us more information about Q3 GDP growth. So far, it seems like growth in Q3 has continued around the same pace of a quarter percentage per quarter as in H1 17, perhaps slightly higher. PMI manufacturing due on Monday is likely to have risen to the 58.0 level, in line with the level of the equivalent index for the euro area, as the UK has a tendency to follow the euro area index (although the UK index is more volatile).”

“PMI service data on Wednesday is more important given the size of the service sector. While Lloyds Business Barometer rose slightly in September, it still signals downside risks also for PMI services, so we will not be surprised if it falls slightly to something like 52.7.”