14 May 2018


14 May 2018

Good morning,

The latest retail spending figures have been released this morning and they once again make worrying reading for Britain’s high streets.
The statistics show that spending in shops last month fell by 5.4% compared with the previous year, compounding the 2.9% decrease seen in March. This means spending has fallen for 11 of the past 12 months and the index is on course to deliver its worst performance since 2012.
To add further gloom, there was also an increase in town centre vacancies, with all parts of the UK outside London contributing to the country’s 9.2% vacancy rate. However, it appears the decline has extended to online shopping to nearly the same extent, with e-commerce only suffering a 0.1% year-on-year fall, compared to the 5.4% drop experienced by stores.
Retailers had expected to see an upturn in fortunes in April – having assigned poor footfall prior to that to the unusually cold weather in February and March – so this morning’s figures will heighten alarm and leave the sector searching for answers that may lead to a reversal of its fortunes.
Mark Antipof, the chief commercial officer at Visa, which compiled the stats, said that consumers were slow to respond to the change in economic conditions and this could be attributed to the sluggish expenditure rates. Antipof believes consumers remain in “belt-tightening mode” despite the Bank of England last week predicting that stronger wage growth and falling inflation could spark an increase in household spending. However, almost in the same breath, the central bank suggested that people might take the opportunity to rebuild savings as they see the economy start to pick up.
Retailers can take some comfort from the fact that 80% of purchases are still happening in-store. However, judging by today’s outlook, it can’t afford to wait to find a response to this downward trend in Britain’s consumer economy.


Theresa May’s plans for Britain’s customs arrangements after Brexit continue to split her cabinet, as they prepare to meet again tomorrow. Jeremy Hunt has told colleagues that they must trust the prime minister’s plan, while Michael Gove has said there are “significant question marks” over her preferred customs model. (£)
The head of MI5 will tell a group of European security chiefs that losing territory in the Middle East means Islamic State will likely aspire to "devastating" and "more complex" attacks in Europe. Director general Andrew Parker’s speech comes after one person was killed and four others were injured in a knife attack in Paris over the weekend. He will also condemn Russia for its part in the Salisbury poisoning.
Italy’s populist parties are close to forming a government after reaching a tentative coalition agreement. The leader of the anti-establishment Five Star Movement and the head of the far-right League met over the weekend and will meet with Sergio Mattarella, Italy’s president, today. However, the agreed choice for prime minister has yet to be reached. (£)


Xerox has called off its $6.1bn sale to Japan’s Fujifilm in a move that is being seen as a victory for the US company’s activist investors. By reaching a deal with Carl Icahn and Darwin Deason, who own 15% of the company, Xerox brings an end to months of infighting that saw its chief executive fired.
The chairman of communications services group WPP is braced for a shareholder backlash over the secretive ousting of Sir Martin Sorrell after investors were advised to oppose his re-election at next month’s annual meeting. Glass Lewis, the proxy shareholder service, backed a vote against the re-election of Roberto Quarta as chairman due to his part in the company’s failure to “adequately prepare” for the replacement of its long-serving chief executive and the “opaque nature” of the investigation into his conduct. (£)
M&G Investments, one of the UK’s biggest investment managers, has warned that lenders will be forced to push up mortgage rates once a £127 billion term funding scheme run by the Bank of England comes to an end. The scheme, which has proved highly popular, was introduced in August 2016 to provide lenders with low-cost loans as an economic stimulus after the Brexit vote. (£)


The week ahead
The week begins on a controversial note as Donald Trump joins his daughter Ivanka at the opening of the new US embassy in Jerusalem, on the day Israel celebrates 70 years as an independent state. The move from Tel Aviv is seen as a largely symbolic gesture, with about a dozen staffers transferring to the new location and little investment being made on renovations.
All eyes will be on Vodafone on Tuesday when the telecoms giant reports its full-year results. Vodafone is in the midst of a €19bn takeover of Liberty Global’s cable networks in Germany and eastern Europe, a move that represents the most significant consolidation in European telecoms in more than 10 years. Allianz, easyJet and Home Depot also report earnings.
It will then be the turn of Walmart to go under the spotlight when it reports first-quarter results on Thursday. The company this month agreed a deal to merge its UK supermarket chain Asda with British rival J Sainsbury. Royal Mail will also report full-year results, the last for chief executive Moya Greene before her retirement in September.

Angling Direct
Victrex plc

The City Pub Group
Fidelity European Values
Global Ports Investments GDR (REG S)
Integrated Diagnostics Holdings
Midwich Group
Non-Standard Finance
SafeCharge International Group Limited (DI)



“If we speak with one voice for once, Channel 4 can belong to Glasgow”. This is Kevin Pringle’s assessment of the chances of Scotland’s biggest city becoming the new home for Channel 4 if the country’s politicians put their differences aside and work together. Writing in The Sunday Times, Pringle praises Stuart Cosgrove, describing the former senior C4 executive as a “superb” chair of the Glasgow bid. (£)

Writing in the Financial Times, Roula Khalaf has cautioned Iran to avoid a rash response to Donald Trump’s decision to re-impose sanctions on the country. Khalaf appreciates that responding with restraint will prove difficult were the economy to begin to falter and says it will need the increased support of Europe, but calls on Hassan Rouhani, a pragmatic president, to claim the high ground. (£)


The Mayflower Pub in London is the only pub licensed to sell US stamps due to its historical connection to the original Mayflower ship that carried the Pilgrim Fathers.



House of Commons

Oral questions
Education (including Topical Questions)

Haulage Permits and Trailer Registration Bill [Lords] - 2nd reading

House of Lords
Oral questions
Steps to ensure labelling and packaging of animal-derived products does not mislead consumers - Lord Teverson
Importance of tourism to the economy of the United Kingdom - Lord Lee of Trafford
Extent to which £200 contribution to those claiming disabled student allowances has affected the reduction in claimant numbers - Lord Addington
Plans to assist England's historic cathedrals – Lord Cormack

Scottish Parliament
No business scheduled


House of Commons
Oral questions
Foreign and Commonwealth Office (including Topical Questions)
Ten Minute Rule Motion
Representation of the People (Gibraltar) - Craig Mackinlay
Consideration of Lords amendments
If necessary, consideration of Lords amendments

House of Lords
Oral questions
Prospects for a negotiated end to the civil war in Syria that does not involve President Assad - Lord West of Spithead
Protecting the rights of wheelchair users to travel on buses - Baroness Deech
How much Overseas Development Assistance was spent on fossil fuel subsidies - Baroness Sheehan
By-elections for hereditary peers - Lord Grocott

Scottish Parliament
Topical Questions

Legislative Consent Motion: European Union (Withdrawal) Bill - UK Legislation