12 August 2019

Katie Stanton

12 August 2019

Good morning,
 
If there’s one man who can polarise opinion, it’s Donald Trump. From philanderer to family man; patriot to alleged racist; smart guy to full-on, national shame-level clown, we’ve heard it all before.
 
But if there’s one thing we might all be able to agree on, it’s that ‘The Donald’ can be a touch unpredictable.
 
One minute he’s posing with his thumb up next to a baby recently orphaned by the El Paso shootings; the next he’s retweeting conspiracy theories about the Democrats’ involvement in the suicide of disgraced financier Jeffrey Epstein. (Still not clear on whether he thinks they murdered Epstein or smuggled him out of prison in a catering trolley, but you can fill in those details for yourself.)
 
And if all this wasn’t enough of a mind-fudge for you, the ramifications of Trump’s unpredictability are not constrained by the borders of the United States. In fact, the effects of his blundering through foreign policy are increasingly felt in every corner of the world. 
 
Last week, Gideon Rachman of the FT asked: what happens when the world cannot rely on the US? It turns out, a lot. Trump’s impulsive foreign policy can be linked to instability in both Kashmir and the Korean peninsula, to name just a few.  
 
Indian prime minister Narendra Modi’s abrupt announcement to revoke the autonomy of the Muslim-majority Jammu and Kashmir region caused a stir last week.
 
Modi claims he was compelled to act due to fears that Pakistan, which claims Kashmir as its own, could turn its attention back to the region and deploy battle-hardened militants from Afghanistan. Ultimately, this would lead to an upsurge in terror attacks and potentially a very bloody conflict.
 
But why now? The region is expecting a period of considerable instability over the next few years as a result of Trump’s plan to withdraw up to 6,000 US troops from Afghanistan as part of a deal with the Taliban.
 
Now we can’t blame Trump for India’s ‘Hindu-supremacist’ nationalist government, who deployed 35,000 troops to the Kashmir Valley despite it already being one of the most militarised regions in the world, but at the very least he provided Modi with an excuse.
 
To really rub salt in the wound though, Trump offered to “mediate over Kashmir” , leaving a bad taste in the mouths of much of the Indian administration.
 
His track record is equally troubling on the Korean peninsula. Trump started his legacy as president by promising to unleash “fire and fury” if North Korea failed to stem its nuclear weapons programme.
 
Shortly thereafter, however, he developed an undeniable bromance with North Korean dictator Kim Jong Un. This left South Korea wondering why its supposed-ally was bonding with a known tyrant over shrimp cocktails.
 
South Korea is not alone in its trepidation: Trump is floundering around in the Strait of Hormuz, showing a lack of interest in Hong Kong and staying well away from Ukraine. His strategy (if there is one) seems to be based entirely on his mood that day.
 
And we’re pinning all our hopes for a no-deal Brexit on a trade deal with this guy? I hope we’ve got a Plan B.
 
Oh wait…

News

The Crown Prosecution Service will receive an extra £85 million over the next two years to help tackle a rise in violent crime. It comes as prime minister Boris Johnson launches a review of sentencing of the most prolific and violent offenders. On Sunday he promised to create an extra 10,000 new prison places and expand stop-and-search powers.
 
The average wait for a routine GP appointment in the UK has risen above two weeks for the first time, according to an annual survey of doctors. The poll found the average waiting time was almost 15 days, with more than one in five GPs saying that the wait exceeded three weeks. In response, NHS England claimed the findings did not tally with official statistics.
 
Green MP Caroline Lucas has called for an all-female emergency cabinet to block a no-deal Brexit and hold a second referendum. Writing in the Guardian, she claimed it could “bring a different perspective” and added that her aim would be to force a no-confidence vote in prime minister Boris Johnson. She would then hope to form a “national unity government”.

Business & Economy

According to the British Retail Consortium, the number of empty shops in town centres is at its highest level in four years. In July, the vacancy rate was 10.3%, its highest level since January 2015, and footfall fell by 1.9%, the worst July performance in seven years.
 
British citizens travelling to the EU on business after a no-deal Brexit will face a complex web of work permits that could take weeks or even months to obtain. According to the consultancy EY, business travellers without authorisation could be turned away at EU borders and companies liable for fines. (£)
 
It will take at least four years to turn Sports Direct into the “Selfridges of sport”, Mike Ashley’s future son-in-law has said. Michael Murray is in charge of “elevation strategy” at the retailer and recently called on the government to step in and stop further carnage on the high street, while promising that Sports Direct would continue buying up struggling retailers. (£)

Markets

The week ahead

British policymakers eagerly await today’s labour market survey, after last week’s disappointing GDP figures. Economists are optimistic. They expect wages to grow 3.7% and for 70,000 more jobs to have been created in the quarter.
 
Additionally, shipping services company Clarkson is expected to release its half-year results today. The escalating US-China trade war is likely to have had an impact on the company, although a spike in the Baltic Dry Index (a measure of activity in the dry cargo market) and the weakness of sterling could help to buoy their results.
 
On Wednesday all eyes will be on Prudential’s results for the first half of the year. But that’s not the main event: the insurer will release extra details on its plan to demerge its asset-management operation (M&G Prundential) and its plans for Brexit. To prepare for Britain’s exit from the EU, Prudential has set up a Luxembourg subsidiary, giving it access to the European market. This is in an effort to soften the impact of regulatory change and help to shield the company in the event of a no-deal Brexit.
 
And finally, on Thursday retail sales figures for July are expected to show a bounceback - despite challenging conditions on the high street - after more positive results for June. The sector is vulnerable to changing weather conditions and major events. Happily July featured both sunshine and Wimbledon, the British Grand Prix, the tail end of the Women’s football World Cup, and England’s cricket World Cup win.

What's happening today?

Interims
Hikma Pharmaceuticals, William Hill
 
AGMs
Adams, Samuel Heath

International Economic Announcements
(07:00) Balance of Trade (GER)
(07:00) Current Account (GER)
(13:30) Producer Price Index (US)

UK Economic Announcements
(09:30) Balance of Trade
(09:30) Industrial Production
(09:30) GDP (Preliminary)
(09:30) Index of Services
(09:30) Manufacturing Production
(09:30) Gross Domestic Product

Columns of Note

Giving an outside perspective on Brexit, Alex von Tunzelmann comments on Britain’s contradictory narratives in The Atlantic. She argues that we are torn between a belief in British exceptionalism and the perception that Britain is a lone, plucky underdog. These imperialist throwbacks are the root behind the policy crises we see today (David Cameron thought he was invincible; Boris Johnson thinks so too) and they also form part of the reason why we can’t navigate our way out of them.
 
Writing in The Times, Alex Massie turns his attention to the polarisation of British politics. He notes that, at the moment, victory is nothing unless it is complete. Opponents must surrender wholeheartedly. In Brexit terms this translates as the Leavers’ rejection of May’s deal, even though it is what they voted for. The consternation in the aftermath of the vote just highlights how problematic binary one-off referendums are. They deliver a snap verdict that is meant to be forever – which is why it is so important to secure the losers consent beforehand. (£)

Did you know?

When polled, 92 per cent of cat owners described their relationship with their cat as "easygoing". Six per cent described it as "tense". (The other two per cent either didn't know, or refused to answer.)

Parliamentary highlights

House of Commons
In recess until 3rd September

House of Lords
In recess until 3rd September

Scottish Parliament
In recess until 2nd September