On Sunday, the first round of the French Presidential elections saw the incumbent Emmanuel Macron gain 27.6% of the popular vote while Marine Le Pen took 23.4%. As such the two leaders will now go head-to-head in the second round of voting on 24th April as they compete for the next five-year presidential term.As France enters into the second round, the question will now focus on the dynamics of the swing from those whose candidates did not progress into the final run off. For example, fourth placed candidate Eric Zemmour’s, who took 7% of the vote will be supportive of La Pen as will Nicolas Dupont-Aignan who took just over 2%. However, while the third-place candidate Jean-Luc Mélenchon (who took just under 22%) has not publicly come out in support of Macron, he has urged his followers not to vote for La Pen, which is of course more or less tantamount to supporting Macron. On that note, given that only three candidates commanded more than 10% of the vote, many analysts are considering how ‘tactical voting’ was used by a considerable amount of the French electorate to boost support for both of the two leading candidates.
Pollsters were quick to make predictions on the second round with Ifop predicting that Macron will take 51% while Le Pen will take 49%, while Elabe suggested it was more like 52% to 48% in favour of Macron.Of course, the 2017 election saw Le Pen take just 34% of the final vote against Macon’s landslide 66%. This was following the first round where Macron took 24% to La Pen’s 21.3%.
Hence, all eyes will be focused on the remainder of the election campaign, not least the televised debate on 20th April. Despite Macron being the favourite to win, Brussels will no doubt be concerned over the ramifications of a potential victory for La Pen’s Eurosceptic National Rally party.
Sunak Controversy Continues
After a difficult week for the Chancellor and his wife Akshata Murty over the latter’s non-dom status, over the weekend the former published a letter to Boris Johnson requesting a review from Lord Christopher Geidt. The review will aim to investigate whether Sunak properly declared his interests since holding his ministerial posts starting in 2015. This follows news emerging over the weekend that Sunak held a US Green Card for 19-months while he was the Chancellor and six years as an MP, meaning that he declared himself a ”permanent US resident” for tax purposes. This was the latest blow to No.11 following news around Akshata Murty’s tax status.
Aides close to Sunak have said that he sufficiently declared his wife’s non-dom status. Akshata Murty, the daughter of the Indian businessman N.r. Narayana Murthy, holds a 0.93% share in her father’s business, Infosys. These shares are said to be worth around £700m, of which her non-dom status (which the PM denies knowledge of) allows her to avoid paying tax on some £11.5m in dividends each year. On these figures, UK taxpayers would expect to pay around £4.5m and hence given that her non-dom status costs around £30,000 a year, the cost savings are of course.
Murty has now agreed to pay tax on foreign earnings in the UK, although will not do so on backdated earnings, a decision estimated to save her around £20m in tax. Murthy will also retain her non-Dom status allowing her to avoid a potential £275m in inheritance tax, in the event of her father’s passing.
Amongst Sunak’s known holdings are a £5.5m property in California and three other properties worth around a further £10m.
UK GDP figures for February have come out below expectation, indicating that the economy grew just 0.1% over the month, in sharp contrast to January’s print of 0.8%. While the ONS suggests that the UK economy is around 1.5% above pre-pandemic levels, UK growth figures have been revised down in recent months owing to the growing cost of living affecting consumer spending and the rising cost of energy and commodities hitting industry.
The ONS indicate that manufacturing had taken a dive as the UK is still struggling with semiconductor shortages and various other supply chain issues. There has however been some recovery in the British tourism industry with growth up 33% from a year ago. Following today’s data, all eyes will be on UK unemployment data tomorrow to gain some insight into the country’s labour market.
Data To Watch This Week
Other primary data out this week includes CPI figures out of the US – expected to come in at 8.5%, well above last month’s print of 7.9% which comes in at 12:30 tomorrow. This will be followed by UK CPI on Wednesday where the market predicts a print of 6.7%, which would similarly represent a considerable acceleration from last month’s print of 6.2%.
The ECB are also expected to keep rates unchanged at 0% on Thursday, while market’s will be paying close attention to retail sales in the US which will provide more colour on the extent to which consumer spending habits are driving inflation across the world’s largest economy.
Have a great day.