Proactive Investors -
Pensions issue?
There was a notable absence of a pensions bill in the King's speech, says Myron Jobson, personal finance analyst at Interactive Investor.
The speech did mention a "pension investment" bill, which is thought to mean the draft audit reform and corporate governance bill, and pension schemes bill.
Jobson says there was a notable omission of detail "especially concerning the Labour government’s manifesto pledge to conduct a pensions review to improve outcomes for savers and increase investment in the UK market" but it "could mean that more time can be allocated to ensure that any reforms are well thought out and pass the sniff test with key stakeholders in the pension sectors".
He notes that the speech sets out the government’s broad legislative agenda, but doesn’t include every policy, with more detailed financial measures and announcements to be unveiled in the next fiscal event, though Chancellor Rachel Reeves has promised to provide an update before the autumn.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown (LON:HRGV), says the King’s speech did allude to an aim to tackle the ‘lost pots’ problem by automatically bringing together individual’s deferred small pots into one place.
She says the news "heralds positive news for people’s pensions, with simplicity and greater flexibility".
She adds: "Government estimates that the introduction of these measures could boost the average person’s pension pot by 9% over the course of their career."
King's speech headlines
The King's speech is over, with King Charles having read out the main plans of the new Labour government.
He said that the government intends to be "mission-led and based upon the principles of security, fairness and opportunity for all".
A bill will be introduced to set up Great British Energy to accelerate investment in renewable energy, a "new deal for working people" ending zero-hours contracts, and ending the exemption from VAT for private school fees to fund more new teachers.
The new Labour government will legislate to bring rail services into public ownership, and introduce an English devolution bill, giving powers to local councils to take control of their bus services.
"Legislation will be introduced to give greater rights and protections to people renting their homes, including ending no fault evictions and reforming grounds for possession" the King also said.
An AI regulation bill was also announced, while Starmer's party is also reviving the crackdown on smokers and vapers, alongside a potential ban on energy drink sales.
“A Bill will be introduced to progressively increase the age at which people can buy cigarettes and impose limits on the sale and marketing of vapes,” the King said.
FTSE in the green
The FTSE 100 has turned positive, just. The index is up just over one point at a little above 8166.
Only two of the top 10 blue chips are in the red, while top of the leaderboard are Barclays (LON:BARC), up 2%, Endeavour Mining PLC (LON:EDV), up 1.7%, and BT Group (LON:BT), up 1.6%.
London's mid caps are still in the red though, with the FTSE 250 index down 89 points or 0.4% at 21,125.
European inflation still 'relatively benign'
Eurozone inflation came in at 2.5% for June, a dip from 2.6% the month before, matching the consensus and first estimate.
The core rate was stable, at 2.9%, also matching the consensus.
"All eyes are on persistently sticky services," says Claus Vistesen, economist at Pantheon Macroeconomics, as still-high inflation remains in insurance, package holidays, hotels & accommodation, social protection, refuse collection and repair services adding up to inflation around 4%.
"Looking ahead, a number of near-term upside risks loom," he says, with France's energy inflation to be lifted in July by a hike in the distribution costs of gas, the summer Olympics likely to lift inflation in French services, and Taylor Swift’s July tour across European major cities looms as "further upside risk to inflation in hotels and other accommodation".
But even when we add these to our forecasts, however, we still see a relatively benign next few months. We think headline inflation will be unchanged in July, before falling to around 2% in August, as base effects in energy shift. This should help get a September rate cut over the line. In the core, we think services inflation will dip by 0.2pp in July, to 3.9%—with prices rising by 1.2% m/m—before advancing to 4.1% in August as the boost from the summer Olympics kick in. Risks to the July number are tilted to the upside mainly due to hospitality. In non-energy goods, meanwhile, we look for further disinflation in coming months, with inflation dropping to 0.4% in July and further to just above zero in August. As a result, our preliminary forecasts suggest that core inflation will dip to 2.7% in July, and further in August, to 2.6%, again supporting a second rate cut in September.
Fashion deal
VF Corp (NYSE:VFC) has sold its streetwear band Supreme to Italo-French sunglasses maker EssilorLuxottica for $1.5 billion.
Vans and Timberland owner VF, which bought Supreme for $2.1 billion in 2020, decided to offload the brand following a review of its portfolio that found "limited synergies.
EssilorLuxottica chief executive Francesco Milleri and deputy Paul du Saillant said they saw an "incredible opportunity to bring an iconic brand" into the company, saying it offers "a direct connection to new audiences, languages and creativity,".
Supreme used to be a supercool skating brand when launched in the 1990s, but has lost its edge as it expanded into a global 'urban' brand.
Trump lays out Fed plans
Donald Trump has stated he will not seek to remove Federal Reserve chair Jerome Powell before his term ends and would consider JPMorgan (NYSE:JPM) boss Jamie Dimon for Treasury Secretary if he wins the November 5 election, according to a Bloomberg interview.
Powell's term expires in 2026, and his Fed Board seat in 2028. The interview was conducted in late June.
Powell confirmed on Monday he plans to stay until his term concludes, having been chosen by Trump to lead the central bank in 2018.
Trump later criticised Powell over interest rate hikes and apparently contemplated firing him, though aides advised he lacked the authority.