There’s a distinct ‘back to school’ feeling in the air as politicians prepare to return to parliament next week. If we were hoping that the resumption of business means that matters other than Brexit will occupy the news agenda for a while, we might need to think again.
Michel Barnier and David Davis held a frosty press conference yesterday, ostensibly to provide an update on four days of intense negotiations. But with little news to report, the overarching impression is that each side is increasingly frustrated at the slow progress of talks. As M Barnier put it: “There has been no decisive progress on any of the principal subjects. Time is passing quickly and was short to start with”.
However, David Davis was less pessimistic, indicating there has been “some concrete progress”.
A core issue remains the divorce bill, and the EU’s insistence that this should be agreed before discussions on a trade deal can begin.
It appears that the mood in Brussels is fractious – and Trade Secretary Liam Fox’s remarks yesterday would have done little to calm this. In a display of his approach, Fox insisted that Britain will not be “blackmailed” into agreeing on a divorce bill as the price for starting trade talks. He argues that it is in the interests of both Britain and the EU to begin talks on a trade deal straightaway, citing the need for stability and to reassure commercial organisations that the UK and Europe remain open for business. He would have been all too aware during his visit to Japan that any negotiations on deals between the two countries could not begin in earnest until Britain has left the EU.
With all sides conscious that time is ticking away, it’s likely that a variety of channels will be used to put pressure on the negotiating teams to reach solutions timeously.
The Macron government has announced large scale changes to France’s labour market, in moves that will see a shift of power from workers to employers. The changes will make it easier to hire and fire employees and allow some issues to be negotiated at company level, rather than with unions, in a bid stimulate jobs growth and job creation. Changes to labour law have proved contentious, but are part of a move by Macron to boost the French economy after years of high unemployment and slow growth.
The Kenyan supreme court will make a ruling today on whether last month’s elections were tampered with following claims from opposition party leaders. Opposition leaders claimed that members of the ruling party had hacked computer systems to ensure records showed a win for leader Uhuru Kenyatta. If Kenyatta’s victory is overturned, new elections would have to be held within 60 days.
Almost a third of US oil refineries have been affected by tropical storm Harvey. Refineries still in operation on the US Gulf Coast are struggling to import crude because of outages at port facilities. Meanwhile the price of petrol has risen sharply, and a state of emergency has been declared in North Carolina to allow petrol to move through the state more quickly in response to delivery problems.
BUSINESS AND ECONOMY
Volkswagen UK now offers a diesel vehicle scrappage scheme, providing customers discounts of up to £6,000 when trading in a diesel vehicle to purchase a new car. The scheme follows similar ones already in place at Volkswagen’s competitors, in the wake of increasing political pressure on car makers to encourage customers to shift towards cleaner vehicles. Toyota UK is also launching a similar diesel scrappage scheme today.
Britain’s biggest recruitment company Hays says the UK job market has stablised since the Brexit vote but remains subdued. It saw an immediate drop in the hiring market in the initial months after June 2016. The company has recorded strong growth in other larger markets including Europe and Australia, contributing to an increase in overall group operating profit to more than £200 million.
Thousands of Northern Rock shareholders are renewing their campaign against the UK government for compensation for their losses, claiming that the government is set to make billions of pounds in profit from the nationalisation of the bank. The group have argued the zero valuation attributed to the bank’s equity before the government announced tits nationalisation is invalid and that Northern Rock was singled out for unfair treatment.
Low US inflation numbers and dampened consumer spending have limited expectations that the Federal Reserve will increase interest rates in December. Annual inflation in the US has dropped to 1.4 per cent, the smallest gain since December 2015 – a slowdown which doesn’t align with other evidence which suggests improving economic conditions. Market watchers will be following the date closely today as the latest report on the US jobs market is released.
What happened yesterday?
The FTSE 100 closed up 0.89 per cent yesterday. Mining shares lifted the index on the back of a rise in metal prices, with better than expected data on Chinese manufacturing. This had a positive effect on some mining shares, including Anglo American, which was up nearly 2 per cent.
Outsourcing company Serco enjoyed its best trading day in over a year following the release of a sector note from UBS, with Serco as its sector pick.
Brent crude is up almost 3 per cent and has risen about $52 a barrel, contributing to modest gains for Shell and BP.
US Economic Announcements
(13:30): Non-Farm Payrolls
(13:30): Unemployment Rate
(15:00): Construction spending
(15:00): ISM Manufacturing
(15:00): ISM prices paid
(15:00): U. of Michigan Confidence
(20:30): Auto Sales
COLUMNS OF NOTE
The FT’s long read explores the contentious issue of an ethical code for robots. As AI becomes ubiquitous, it asks who is morally responsible for the behaviour of AI controlled devices. And not just on an ethical but also on a practical level – for example, if a driverless car crashes, who pays for the damage? As a starting point on these questions, leaders in the technology space have argued for greater regulation in the automation sector.
On the 20th anniversary of Princess Diana’s death, The Conversation suggests that this marked a shift in the way the media reported on the passing of high profile individuals, marking the beginning of “mediated death”- where coverage is sculpted and packaged for consumption.
DID YOU KNOW?
A hard drive containing unfinished works by the late Sir Terry Pratchett has been crushed by a steamroller, at his request. The author passed away in 2015.
House of Commons
In recess until 5th September
House of Lords
In recess until 5th September
In recess until 4 September