13 March 2018


13 March 2018

Good morning,

Whisper it, but could the prime minister finally be living up to her job title?

That was certainly the reaction from the commentariat and some of Theresa May’s backbenchers yesterday as she delivered a speech to parliament on the government’s proposed response to the poisoning of double agent Sergei Skripal and his daughter by a Russian nerve agent in Salisbury last week.

Revealing that the agent in question was novichok, a chemical weapon up to eight times more powerful than the notorious XV nerve gas, the prime minister said it was thus “highly likely” that its use amounted to a “direct attack on our country” by Russia or that “it had lost control of potentially catastrophically damaging nerve agent.”

She gave Russia until midnight tonight to explain its actions, finishing: “Should there be no credible response, we will conclude that this action amounts to an unlawful use of force by the Russian state against the United Kingdom.”

This is quite something. The prime minister’s language suggests the government is treating this far more seriously than an isolated attack on an individual as the then-Home Secretary John Reid had in response to the murder of Alexander Litvenenko in 2008. Instead, by viewing this as an injury to the UK as a whole, Britain could seek legitimate recourse through the UN or NATO and take further action against Russia in self-defence.

Jeremy Corbyn may have been right to point out the government’s lax approach to Russian money in the UK in a speech which otherwise did not win him any friends. But it is one thing for May to punish wealthy oligarchs with a slap on the wrist and another to seek united international co-operation against a pattern of increasing Russian aggression against the UK and its western allies.

Sure, these are just words, not action. But in a clear break with precedent, by opting for a staged response where the UK’s red lines are drawn from the outset, she may yet land a blow.

It is early days, but I get the feeling this is one fight the prime minister won’t be sitting out.


Agreement has been reached between academic union leaders and university officials over a pension dispute, paving the way for strike action to be suspended. If ratified by union members, the deal would mean an independent re-evaluation of the pension deficit and a three-year transitional benefit arrangement to tackle a funding gap for universities. The strike by the Universities and College Union entered its fourth week on Monday and has disrupted classes at more than 60 universities.

President Donald Trump has abandoned demands for more guarantees against further missile testing by North Korea ahead of a meeting with its leader, Kim Jong-un. The US has instead reaffirmed its commitment to full denuclearisation, an end to missile testing and the continuation of joint US-South Korean military exercises. The date and location of the proposed meeting have yet to be confirmed between the US, China and North and South Korea, although Beijing, Washington and Switzerland are thought to be frontrunners.

Business & Economy

Chancellor Philip Hammond is expected to defy calls for additional spending in public services as he delivers his spring statement later today. The Treasury has confirmed there will be no tax or spending decisions in this statement but has hinted at the announcement of a consultation into tax reform. The Office for Budget Responsibility is also expected to report higher growth projections for 2017 and a significant reduction in public borrowing due to better than expected tax receipts in recent months.

The president of the CBI has criticised the Conservative’s plans for a hard Brexit and Labour’s programme for renationalization as threatening “serious harm” to the British economy if taken forward. Speaking to the employers’ group last night, Paul Drechsler said investors were “reaching for their coats” over both the government and opposition’s headline policies, called for a rethink on both accounts and cautioned against complacency that neither would happen.

David Solomon has emerged as the favourite to take over as chief executive of Goldman Sachs after his rival, co-president Harvey Schwartz, announced his retirement yesterday. Mr Solomon, who is currently chief operating officer with Goldman Sachs, has been seen as a champion of the bank’s efforts to increase lending to its investment banking clients and will replace Lloyd Blankfein, who is thought could stand down in late 2018 or early next year, to coincide with the investment bank’s 150th anniversary.

President Donald Trump has blocked Broadcom’s $142 billion hostile bid for rival chip company Qualcomm, marking an unprecedented intervention in corporate deal making by the White House. The president criticised the bid by Singapore-registered Broadcom as a “threat to the national security of the US”, despite Broadcom’s announcement that it was planning to re-domicile as a US company by April 3.


What happened yesterday?
The FTSE 100 stalled yesterday as concerns over new data showing a fall in London house prices and uncertainty over the hostile takeover of GKN by Melrose hit home for investors. By close of play, the FTSE 100 stood at 7,214.76 or 0.13% lower.

Turnaround specialist Melrose Industries was beaten in a race to the bottom of the FTSE’s movers table by GKN, who fell by 2.5 per cent. An increased ‘final’ offer of £8.1 billion by Melrose in its hostile takeover bid of the engineering giant failed to impress, also dragging Melrose to the bottom of the FTSE 250, closing 5.1 per cent lower.

Meanwhile, EasyJet led the FTSE 100 market risers, jumping 2.9 per cent in response to raised forecasts from Credit Suisse, who cited a positive outlook for pricing and benign capacity growth at the airline’s top 20 airports.

Beyond company news, investors were also spooked by new figures from estate agency YourMove that suggested houses prices in London had fallen by as much as 15% in the last year, with an average property in Wandsworth shedding £100,000 in particular.

As the markets were down, the pound was up, closing 0.4 per cent against the dollar at $1.39 and remaining relatively stable at 0.2 per cent higher versus the euro at €1.13.

Baillie Gifford Shin Nippon
Cairn Energy
French Connection Group
Fevertree Drinks
Gresham Technologies
Glenveagh Properties
Goals Soccer Centres
H&T Group
LMS Capital
Midwich Group
Menzies (John)
Non-Standard Finance
Stadium Group
Smart Metering Systems
Surgical Innovations Group
Close Brothers Group
Eagle Eye Solutions

BlackRock Commodities Income Inv Trust
CC Japan Income & Growth Trust

Intl. Economic Announcements
(12.30) Consumer Price Index (US)

Columns of Note

The Chancellor needs to announce a softening of austerity measures and further plans to tackle corporate greed in his Spring Budget today if the government is prevent socialism from wrecking the economy, Rachel Sylvester argues in The Times. Predicting that a hard Brexit will discredit the Conservatives’ reputation for economic competence for a generation, Sylvester suggests only much greater intervention will stave off the possibility of a Corbyn government and keep the crucial votes of the ‘JAMs’ on side.

Also writing in The Times, Hugo Rifkind comments that Steve Bannon’s recent overtures to populist movements as part of a “European tour” may fall on deaf ears in the UK. Whilst acknowledging the vote for Brexit and a shift to the fringes by both Labour and the Conservatives, Rifkind muses that future generations might look back on this second coming of populism in Europe as largely bypassed by the UK.

Did you know?

The origins of the name for Moscow’s Red Square has nothing to do with communism, but derives from the word “krasnyi”, which once meant “beautiful”.

Parliamentary highlights


House of Commons

Oral questions: Business, Energy and Industrial Strategy (including Topical Questions)

Ministerial statement: Spring Statement 2018 by the Chancellor of the Exchequer – Mr Philip Hammond

Ten Minute Rule Motion: Holocaust (Return of Cultural Objects) (Amendment) – Theresa Villiers

Debate: Motions relating to Universal Credit, Children and Young persons

Adjournment: Hemel Hempstead urgent care centre – Sir Mike Penning

House of Lords

Oral questions

Continuation of train services on the East Coast mainline - Lord Beith

Making adjustments to the Apprenticeship Levy to facilitate the improved working of that programme - Lord Blunkett

Government's assessment of the national scale of the “grooming gang scandal” - Lord Pearson of Rannoch

Ensuring a high standard of corporate governance at businesses that provide essential public services - Lord Haskel


Unpaid Work Experience (Prohibition) Bill - Committee stage - Lord Holmes of Richmond

Supply and Appropriation (Anticipation and Adjustments) Bill - All remaining stages - Lord Bates

Secure Tenancies (Victims of Domestic Abuse) Bill [HL] - 3rd reading - Lord Bourne of Aberystwyth

Smart Meters Bill - 2nd reading - Lord Henley

Scottish Parliament

Topical Questions

Pre Stage 2 Debate: UK Withdrawal from the European Union (Legal Continuity) (Scotland) Bill


House of Commons

Oral questions: Wales

Prime Minister’s Question time

Ten Minute Rule Motion: Supervised Drug Consumption Facilities – Alison Thewliss

General debate: European Affairs – Day 1

Adjournment: Banking in North Ayrshire – Patricia Gibson

House of Lords

Legislation: European Union (Withdrawal) Bill - Committee stage (day 7) - Lord Callanan

Oral questions: Effect on Universal Credit work incentives of recently announced proposals for passporting family entitlement to free school meals - Lord Kirkwood of Kirkhope

Improving rural bus services - Baroness Randerson

Checks made on individuals before they meet the Prime Minister or Cabinet ministers - Lord Storey

Legislation (cont.): European Union (Withdrawal) Bill - Committee stage (day 7) - Lord Callanan

Scottish Parliament

Members’ Business: Commonwealth Day 2018 – Stuart McMillan

Portfolio Questions: Health and Sport

Scottish Labour Party Debate: Procurement

Members’ Business: Incinerators, Public Health and Planning in Scotland – Monica Lennon