The best action films encourage the viewer to entertain the idea that the hero is in true peril, safe in the knowledge that he or she won’t ever really bite the bullet.
After some time off over Christmas and endless film reruns on TV, we might be forgiven for projecting similar expectations onto some of Britain’s cornerstone companies. Yet at the end of the first full working week of 2019, we are already facing up to the unsettling fact that two UK corporate heroes might not be as bulletproof as we’d assumed.
John Lewis, the bastion of British retail and all-round good egg confessed that it might not be in a position to pay its workers (partners) their annual bonus. While this may not sound like a big deal, the last time they failed to do so was in 1953.
The ‘Never Knowingly Undersold’ promise is apparently a major factor in holding back John Lewis’ profits. Would it be too obvious to suggest that they aren’t the first organisation to field tough questions about a generally misunderstood promise that’s appeared on the side of a bus?
Then there’s the titan of UK manufacturing that is Jaguar Land Rover (JLR). The announcement that it is cutting 4,500 people from its workforce has been a major talking point in the press and is, of course, devastating news for those whose jobs are on the line. Very much the box office star of the UK automotive sector, JLR’s fortunes are inextricably linked to the view of British manufacturing as a whole, and its latest list of headwinds makes for tough reading.
The most iconic heroes thrive on adversity. We’re on about sequel 12 of ‘Never Knowingly Undersold is dead’ and – like Roger Moore blasting off in Moonraker – JLR has managed to push itself into new technological frontiers in the past. So, let’s hope these businesses can confound the critics and bounce back from the significant challenges they currently face.
Donald Trump is threatening to declare a national emergency to secure funding for his controversial border wall. This radical suggestion comes as the US government shutdown continues amid Democrat resistance to the plan.
The Prime Minister has called the leaders of Britain’s biggest unions (£) to try and build support for her Brexit deal, ahead of the meaningful vote next week. As it stands the government is expected to lose the vote by a significant margin. She spoke to Len McCluskey, head of Unite and a vociferous critic, and Tim Roach, head of the GMB union.
Further changes, including scrapping the two child benefits cap, have been made to Universal Credit by the new Work and Pensions Secretary Amber Rudd. The changes have come amongst fierce criticism of the new benefits system’s effectiveness, but the plan remains to have Universal Credit up and running by 2023.
Business & Economy
Tokyo prosecutors have charged former Nissan Chairman Carlos Ghosn with aggravated breach of trust (£), paving the way for an extended court battle. Mr Ghosn was first charged in December after he understated his pay by $44m over five years.
This morning it was confirmed that Virgin Atlantic, Cyrus Capital partners and Stobart Air have swooped in to buy troubled UK airline Flybe for £2.2m. It was put up for sale two months ago after it was revealed it was losing around £7,000 per day. The regional airline will now operate under the Virgin brand.
China plans to set a lower economic growth target of 6-6.5 percent in 2019. This is less bullish than last year’s target of “around” 6.5 percent. This forecast is driven by fears of higher U.S. tariffs and weakening domestic demand.
What happened yesterday?
Despite a poor day for retailers, the FTSE closed up 0.5% yesterday, primarily thanks to increasing oil prices.
Yesterday was a busy day for retail updates, but the latest figures from the British Retail Consortium and KPMG suggested the sector has had the worst Christmas in a decade – with sales flat in December compared to a 1.4% increase the year before – amid worries about Brexit dampening consumer confidence.
At the same time, the pound was down 0.32% against the dollar at 1.27. It stayed broadly flat against the euro, at 1.10.
Oil prices were further boosted by apparent progress in the US/China trade talks, with Brent crude reaching a high of $61.90.
Grafton Group Units
Moss Bros Group
InterContinental Hotels Group
UK Economic Announcements
(09.30) Balance of Trade
(09.30) Gross Domestic Product
(09.30) Index of Services
(09.30) Industrial Production
(09.30) Manufacturing Production
Int. Economic Announcements
(10:00) ZEW Survey (EU) – Economic Sentiment
(10:00) ZEW Survey (GER) – Current Situation
(10:00) ZEW Survey (GER) – Economic Sentiment
(13:30) Consumer Price Index (US)
(15:00) Business Inventories (US)
(15:00) University of Michigan Confidence (Prelim) (US)
Columns of Note
Writing in the Spectator, Isabel Hardman questions whether John Bercow has outstayed his welcome as speaker of the house. She praises how he has given backbenchers more power, but goes on to question his style and recent interpretations of parliamentary procedure.
Gaby Hinsliff writes about the EU’s proposals to strengthen consumers’ so-called ‘right to repair’ in the Guardian. She says the ability to repair goods rather than throw them out will be beneficial for the planet and will encourage budding engineers to learn about the technology they use every day.
Did you know?
Australia is wider than the moon.
House of Commons
Section 13(1)b) of the European Union (Withdrawal) Act 2018 – the House may meet to continue this Debate is the Business Motion is approved
Route for the Oxford Cambridge Expressway – Subject to the agreement of the House – Layla Moran
House of Lords
No business scheduled.
No business scheduled.