Live update: German retail sales fall sharply as consumers tighten their belts

This week, the Conservative leadership race caravan is moving from parliament to members across the country. Ballots are expected to land on the doormats of 150,000 Conservative Party members in the coming days, while runners-up Liz Truss and Rishi Sunak face off in another televised debate on Sky News on Thursday at 8pm.

But have the Conservative members already made up their minds? Polls showed Truss ahead of the former chancellor among the base. Stephen Bush, who runs the Inside Politics newsletter, warns that Sunak has little time to close the gap with Truss because “most conservative members will vote right away when their ballots arrive.”

Whoever wins the leadership race will inherit a wave of industrial discontent. Thousands of BT workers will walk out on Monday for the second of two strikes, led by the Communications Workers Union, in a pay dispute. In response to BT’s £1,500 pay deal offered to staff in April, the CWU said company bosses had “stuck two fingers” on workers. Dockworkers at the UK’s largest container port are also expected to strike in August.

Across the Atlantic, Hungarian Prime Minister Viktor Orbán will speak at the Dallas Conservative Political Action Conference despite international backlash following a speech he gave on race that led to the resignation of one of his close associates, who called him “pure Nazi”.

Speaking of controversial international travel, Kathrin Hille reports that China is doing everything – possibly including the military – to dissuade US House Speaker Nancy Pelosi from traveling to Taiwan in the coming days.

After the misfortune and the gloom, we can expect a weekend of rejoicing. Along with International Beer Day on Friday, the streets of Brighton will be awash in glitter as one of the UK’s biggest Pride events kicks off. The annual LGBTQ parade will see thousands of people flock to England’s south coast. And don’t miss the fire of love on the big screen, writes our film critic Danny Leigh.

Economic data

The Bank of England will be in a tough spot on Thursday as its monetary policy committee assesses how far it needs to raise interest rates in a bid to bring inflation back to its 2% target. It currently sits at a 40-year high of 9.4% and is expected to climb further. Governor Andrew Bailey said a half-percentage-point increase – which would be the biggest increase in 27 years – is on the table.

The BoE is under pressure to step up its efforts to control inflation after the US Federal Reserve raised its key rate by 0.75 percentage points for the second consecutive month on Wednesday. The White House will announce any good news about US jobs numbers this week to minimize recession fears. The economy contracted for a second consecutive quarter and “core” personal consumption expenditure rose 0.6% in June.

Companies

August’s earnings lull is not quite upon us. After last week’s frenzy, things will only calm down slightly in the coming days, says FT business commentator Cat Rutter Pooley.

The narrative of consumer goods and beverages groups raising their sales forecasts due to soaring inflation was firmly established ahead of Monday’s Heineken and Thursday’s Kellogg results.

Windfall profits made by oil and gas groups have also been at the center of the earnings season. After Shell racked up $11.5 billion in profits in a record quarter, it’s BP’s turn to enter the political storm on Tuesday. The UK imposed additional taxes on energy companies this year, but another round of record profits could increase calls for additional levies.

And while major US banks gave their updates eons ago, reports from the European banking sector continue to circulate. HSBC will update whether lockdowns in China have continued to weigh on its Asian profitability, while Bank of Ireland and Commerzbank report on Wednesday.

Read the full schedule for the week ahead here.