Yesterday, Nigel Farage surprised many by saying he was coming round to the idea of a second referendum on the UK’s membership of the EU. Speaking on The Wright Stuff, the former UKIP leader expressed confidence that a fresh vote would result in a larger winning margin for Leave, thereby killing off the Remain campaign and silencing the likes of Nick Clegg, Tony Blair and Lord Adonis.
Farage has since clarified that he does not want a second referendum, but was instead stating his belief that Leave campaigners should be prepared for another campaign.
The thing is, this isn’t the first time that Farage has expressed his support for a second EU referendum. In May 2016, prior to the historic plebiscite, he said: “In a 52-48 referendum this would be unfinished business by a long way”.
How true that has proved to be, even if the result Farage was referring to is inversed.
The prospect of a second referendum has been discussed at length by pro-Remain voices, with some claiming that the alleged mistruths propagated by the Leave campaign are justification enough for the people to vote again. Others say that there should at least be a referendum on the deal the government reaches, since the UK’s post-Brexit relationship with the EU was not examined during the referendum campaign.
Whether the people want a second referendum is debatable. However, if it does come to pass, I wouldn’t like to be the person that has to tell Brenda from Bristol…
President Trump has cancelled plans to visit London in February. He had been expected to open the new US embassy in Wandsworth, which was commissioned by his predecessor President Obama. It is thought Secretary of State Rex Tillerson will host the opening ceremony instead. In a tweet, Trump said he was disappointed that the old embassy had been sold for “peanuts” and described it as a “bad deal”. Downing Street declined to comment on the cancellation of February’s visit and it is understood that options are being explored for a state visit later in the year, despite no mention of a visit being included in the Queen’s Speech.
Talks between Chancellor Angela Merkel’s CDU/CSU group and the social democratic SPD went late into the night as negotiators explored the possibility of reviving the so-called “grand coalition" which has governed Germany for two of Merkel’s three terms in power. Negotiators have vowed to reach a decision on to whether to initiate formal coalition talks by today. Merkel had warned that it would be a “a tough day” with differences over taxes, pensions, migration and healthcare being the main stumbling blocks to a deal.
Facebook is planning wide-ranging changes to its newsfeed as posts from family and friends are prioritised over that of businesses, brands and media. Mark Zuckerbeg, Facebook’s chief executive, said it was part of the social media giant’s push to help users have more meaningful interactions. Content will be prioritised on whether it encourages interactions between people, as opposed to being “passively read”.
The media will face scrutiny as part of an inquiry into Manchester’s response to the Manchester Arena bombing in May 2017, which killed 22 people and injured hundreds more. The inquiry, commissioned by Andy Burnham, the mayor of Greater Manchester, and chaired by Bob Kerslake, a former head of the civil service, will examine the role of the media after complaints from families of the victims that they had been hounded by the press before the fate of their loved ones had been confirmed.
Business & Economy
The government will meet Carillion and the Pensions Regulator today to discuss the embattled construction company’s deficit. Carillion is the second largest UK construction company, employing 43,000 people globally, and is one of the government’s biggest contractors. It has been awarded contracts to build part of the High Speed 2 railway, manages nearly 900 schools, provides services to the NHS and works with the national grid. However, it is struggling with £1.5 billion of debt (including a pension deficit of £587 million) and was forced to ask its banks for support after breaching loan agreements last year. The company is now worth just £85.9 million after its share price tumbled 90% in just one year.
Dominic Chappell, the owner of BHS when it collapsed, is facing an unlimited fine after being found guilty of failing to provide documents to the Pensions Regulator. Chappell bought BHS from Sir Philip Green for £1 in 2015, but the retailer collapsed just a year later – resulting in 11,000 job losses and leaving a pensions black hole of £571 million. He was found guilty of three charges in the ruling at Brighton magistrates court, with District Judge William Ashworth saying some of the evidence given by Chappell was “not credible” and some of his explanations “made no sense”.
The EU is debating the price for extending Britain’s Brexit transition beyond December 2020. Ambassadors from the EU27 met on Wednesday to discuss whether to refer explicitly to this option in instructions for Michel Barnier, the EU’s chief negotiator. Hungary is reported to have raised the idea of an extension clause to avoid a “cliff edge” should a EU-UK trade agreement not be reached in time, but this has been opposed by both France and Germany, and is thought unlikely to be included in revisions of draft negotiating directives.
What happened yesterday?
The FTSE 100 hit an all-time high for the third consecutive day yesterday, finishing the session up 14.43 points, or 0.19%, at 7,762.94.
Just Eat, the take away ordering website, climbed 4.72% after analysts at Barclays forecast that a ban on credit card transaction fees will increase profitability. The company had previously charged restaurants a 50p processing fee for card transactions, and faced a backlash when it announced a 50p surcharge on all UK orders to counter the card fee ban. However, approximately 30% of Just Eat orders are paid in cash, meaning that the new charge could generate an extra £15 million of revenue. As a result, 2018 results will likely come in ahead of consensus expectations.
Airlines performed well after a UBS consumer survey found that there had been no slowdown in UK ticket spending. Easyjet gained 3.89%, IAG was up 1.61%, and Ryanair climbed 1.77%.
Mining and oil companies also had a good day thanks to oil and metal prices. BP, Shell and Anglo American were up 0.47%, 0.53%, and 3.56% respectively.
Meanwhile, Tesco and Marks & Spencer suffered after announcing disappointing Christmas trading updates.
Tesco dropped 4.53% after missing analysts’ expectations for Christmas trading, whilst shares in Marks & Spencer fell 7.04% as it reported lower sales in its food business, which it has relied on to prop up a struggling clothing division in recent years.
Steve Rowe, Marks & Spencer’s chief executive, said that “consumers are behaving in a recessionary way”.
On the currency markets, the pound was up 0.24% against the dollar at $1.3537, and down 0.44% against the euro at €1.1252.
Artemis Alpha Trust
Bovis Homes Group, Mitchells & Butlers, Tarsus Group, XP Power Ltd. (DI)
Catalyst Media Group, JP Morgan Elect Managed Growth Shares, JP Morgan Elect Managed Cash Shares, JP Morgan Elect Managed Income Shares, Nanoco Group
International Economic Announcements
(13:30) Consumer Price Index (US)
(13:30) Retail Prices (US)
(15:00) Business Inventories (US)
Columns of Note
In the Financial Times, Martin Wolf argues that nationalisation is not the answer to delivering higher quality public services or improving the prosperity of ordinary people. Using the example of the railways, he acknowledges that privatisation is not perfect, but points to the major efficiencies and higher investment that have been seen since the end of public ownership. Wolf finishes by saying that Labour should end its obsession with nationalisation and, instead, seek to reform structures, regulation, and government policy.
Writing in The Guardian, Martin Kettle contends that Labour’s ambiguous Brexit position to date is understandable, given that the vast majority of MPs and members are strongly pro-EU, yet most of the constituencies which the party represents voted to leave. However, with phase one of the negotiations out of the way, Kettle says that the party must now make clear what kind of relationship it seeks with Europe, and tells Jeremy Corbyn that “his larger historic responsibility is to the members, unions and the two thirds of Labour members who are pro-European”.
Did you know?
The Anglo-Saxons called January 'Wulfmonath' ('wolf month') as it was the month that wolves were unable to find food and so would come scavenging at people's doors.
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