13 June 2018


13 June 2018

Good morning,

Having been wheeled out less and less of late, Theresa May’s Brexit motto “no deal is better than a bad deal” has been put in the Conservative attic to sit alongside “strong and stable leadership” and “coalition of chaos”.
Last night, the prime minister was forced into a late concession in order to avoid a Commons defeat. Whilst the government won a vote to overturn amendments put forward by the House of Lords by 324 to 298, it came at a price.
With the result of the vote still in the balance, negotiations were held with 15-20 Tory rebels led by Dominic Grieve in the prime minister’s Commons office. Their understanding is that the prime minister has agreed to redraft the bill when it returns to the Lords. The new measures are thought to include an agreement that a motion to approve the Brexit deal will be put before the Commons within seven days of it being reached, and that the government must seek approval for its next steps if there is no deal by 30 November this year.
According to ITV’s Robert Peston, this would mean there is now no chance of a “no deal” Brexit.
However, Robert Buckland, the solicitor general, raised doubts about what has been offered, saying nothing specific has been agreed.
The rebels have called on May to honour her word. The prime minister may have bought herself more time, but sooner or later, the rebels will have their say in the Commons once more.
Meanwhile, I’m left wondering what the contestants of Love Island will make of the latest developments…


The Pentagon has been forced to reassure allies of its “ironclad” security commitments, after President Trump said that military exercises with South Korea would be halted. Trump made the announcement during a press conference following his summit with North Korea’s Kim Jong-un, and the move is widely viewed as a major concession to Pyongyang. There was confusion as the commitment to end the exercises was not included in the one-age agreement signed by the two leaders, and US Defence Secretary Jim Mattis is thought to have been caught off guard by the statement.
The Saudi-led coalition supporting Yemen’s exiled government in its civil war against Houthi rebels has commenced an assault on the port city of Hodeida. The battle for the city is set to be the biggest and most significant of the three-year-old conflict which has killed 10,000 people. Aid agencies have warned of an impending disaster as 600,000 people live and around Hodeida and the port is crucial for the delivery of aid.
A study by the Mammal Society and Natural England has found that one in five British mammals is at risk of extinction. The red squirrel, the wildcat and the grey long-eared bat are amongst 12 species that have been put on the first “red list” for wild mammals in the UK. Furthermore, the hedgehog and water vole have seen their populations fall by 70% over the last 20 years. Climate change, loss of habitat, use of pesticides and disease are among the factors to blame, according to the report.

Business & Economy

Tesla is cutting nine per cent of its workforce in a bid to reduce costs and deliver its first annual profit the company announced yesterday. In a memo to staff, Elon Musk, the electric carmaker’s founder and chief executive, said that 3,800 jobs would go as part of “comprehensive organisational restructuring”. Tesla has grown rapidly and currently employs 42,500 people worldwide. However, it has not made a profit in the 15 years of its existence and is struggling to hit production targets for the Model 3, its first mass market vehicle.
AT&T’s $85.4 billion takeover of Time Warner has been cleared by a US federal judge. In the government’s first big antitrust litigation against a vertical merger in decades, the Department of Justice argued that AT&T would harm consumers by threatening to exclude Time Warner content from rival distributors and pushing up prices. AT&T portrayed the government intervention as politically motivated due to President Trump’s dislike of CNN, which is owned by Time Warner. Even after excluding the political argument from the case, Judge Richard Leon allowed the proposed deal to go ahead without conditions.
The Financial Reporting Council is set to hand Steve Denison, the PwC partner who audited BHS’s accounts the year before its sale by Sir Philip Green, with a 15-year ban and a £500,000 personal fine, according to Sky News. Denison spent 30 years with the UK’s biggest accounting firm but left last week in the wake of the conclusions reached by the BHS inquiry.
A report by the Treasury Select Committee has called on the financial services industry to tackle an “alpha male culture” and recommended measures to close the City’s gender pay gap. The Women in Finance report comes two months after the deadline for companies with more than 250 employees to report their gender pay gap.
In The Guardian, Nicky Morgan, chair of the Treasury Select Committee, outlines the report’s findings and recommendations, stating that the committee will continue to push for progress.


What happened yesterday?
Global stocks had a mixed day despite the positive tones coming from the summit between President Trump and North Korea’s Kim Jong-un in Singapore.
In the US, the Nasdaq hit a record high, ending the day up 43.87, or 0.57%, at 7,703.79. This was driven by gains amongst solar power, fibre optics, software and biotech companies.
The S&P 500 was also in positive territory, climbing 0.17% to 2,786.85. However, the Dow Jones Industrial Average fell 0.01% to 25.320.73.
Here in the UK, the FTSE 100 dropped 0.43% to 7,703.81.
Mediclinic International plc was the biggest riser on the main index, rising 4.01%. The private hospital group was closely followed by Centrica, which was up 3.73%, after analysis from Jefferies suggested that a proposed government cap on energy prices would be watered down.
Mining companies and housebuilders were amongst the worst performers. Anglo American was down 3.24% and Antofagasta dropped 2.33%, whilst Barratt Developments shed 3.11%, Berkeley Group fell 2.76%, and Persimmon was down 2.45%.
Meanwhile, the FTSE 250 dropped 0.36% to 21,241.64, with Domino’s Pizza leading the losses after the pizza franchise lost its fourth chief financial officer in as many years.
On the currency markets, the pound was up 0.01% against the dollar at $1.3374 and climbed 0.32% against the euro to €1.1383.


Biffa, Charles Stanley Group, Castings, Eckoh, Evgen Pharma, Mulberry Group, NextEnergy Solar Fund Limited Red, Enteq Upstream, Norcros
Autins Group, Redhall Group
Brave Bison Group, City Merchants High Yield Trust, DCC, Futura Medical, International Consolidated Airlines Group SA (CDI), Iofina, Manx Telecom, Maven Income & Growth 2 VCT, Mirriad Advertising, NB Global Floating Rate Income Fund Ltd GBP, Oracle Power, REA Holdings, REI Agro Ltd. GDR (Reg S), Shanta Gold Ltd., Sinclair Pharma, Touchstone Exploration Inc NPV (DI), Witan Pacific Inv Trust, WPP

Trading Announcements
PJSC Magnitogorsk Iron & Steel Works GDR (Reg S)

UK Economic Announcements
(09:30) Consumer Price Index
(09:30) Producer Price Index
(09:30) Retail Sales
International Economic Announcements
(10:00) Industrial Production (EU)
(12:00) MBA Mortgage Applications (US)
(13:30) Producer Price Index (US)
(15:30) Crude Oil Inventories (US)


Columns of Note

Daniel Finkelstein uses his column in The Times to argue that, whilst the G7 may object to President Trump’s style, we have to live with it. He cites defence spending levels, making the US the defender of the free world and only military force capable of projecting power. Finkelstein concludes by saying: “There is no point us complaining if we are not willing to pay more to do something about it”.
In The Telegraph, Tom Harris examines Theresa May’s prospects for continued survival as prime minister. He states that a resignation at a time of weakness, like that of Philip Lee yesterday, will always be seen as an indictment against the leader. However, he contends that, due to the delicate balance within the Conservative Party at the moment, May will likely depart Downing Street at a time of her choosing, probably not long after Brexit day.

Did you know?

The fastest goal ever scored at a men’s football world cup finals came in 2002. Hakan Sukur took just 11 seconds to find the net for Turkey in their third place playoff against co-hosts South Korea.

Parliamentary Highlights


House of Commons
Oral Questions: Wales
Prime Minister’s Question Time
Ten Minute Rule Motion: Packaging (Extended Producer Responsibility) – Anna McMorrin
Consideration of Lords amendments: European Union (Withdrawal) Bill – Day 2
House of Lords
Oral Questions
Impact on crime levels of reductions in local authority funding - Lord Paddick
Impact on the value of the Government's Royal Bank of Scotland shares of the actions of the bank’s global restructuring group - Baroness Kramer
Protection of client assets from administrators of failed fund managements firms, in light of the current Beaufort Securities situation - Lord Lee of Trafford
Representations to the Nicaraguan government to ensure the human rights of those demonstrating against President Ortega are protected - Lord Foulkes of Cumnock
Legislation: Automated and Electric Vehicles Bill – Third reading – Baroness Sugg
Debate: Report from the European Union Committee ‘Operation Sophia: a failed mission’ – Baroness Verma
Scottish Parliament
Ministerial Statement: Response to the Scottish Information Commissioner’s Intervention Report
Portfolio Questions: Education and Skills
Scottish Liberal Democrat Debate: Health
Scottish Liberal Democrat Debate: Finance and the Constitution
House of Commons
Oral Questions: Exiting the European Union (including Topical Questions)
Business Statement: Business Questions to the Leader of the House – Andrea Leadsom
Select Committee Statement: Ninth Report of the Foreign Affairs Committee, FCO's preparations for the 2018 World Cup, HC 1011
Backbench Business: Debate on a Motion on the 70th Anniversary of the Arrival of HMT Empire Windrush at Tilbury Docks - Helen Hayes
House of Lords
Oral Questions
Private rental sector and increasing housing supply - Baroness Wilcox
Cross-departmental responses to incidents within the UK territorial seas and exclusive economic zone - Lord West of Spithead
Sustaining the UK's standalone capacity to manufacture helicopters as part of a modernising defence programme - Lord Ashdown of Norton-sub-Hamdon
The SOS Méditerrannée ship, the Aquarius, and associated rescue operations in the Mediterranean Sea - Lord McConnell of Glenscorrodale
Impact of the Government's "hostile environment" approach towards illegal immigration on those with residency and employment rights - Lord Bassam of Brighton
150th anniversary of the first Trade Union Congress and the contribution made by trade unions to industrial, social and political reform in the UK and internationally - Baroness Prosser
Legislation: Civil Liability Bill [HL] – Report stage – Lord Keen of Elie
Scottish Parliament
General Questions
First Minister’s Questions
Ministerial Statement: Human Trafficking – First Annual Progress Report
Ministerial Statement: Update on the work of the National Council of Rural Advisers