15 March 2018

@AdamDShaw

15 March 2018

Good morning,

Jeremy Corbyn yesterday managed to do something that has thus far seemed beyond Theresa May – he united the Tory party.

The leader of the opposition’s response to alleged Russian complicity in the attempted murder of Sergei Skripal and his daughter Yulia was widely criticised after he refused to condemn the Kremlin directly. His adviser Seamus Milne upped the ante further by comparing the evidence for direct Russian involvement with the case for war in Iraq when briefing lobby journalists.

Corbyn appears to be very much his own on this. Theresa May found support from across the House of Commons, as well Nicola Sturgeon, who was in London for a meeting of the Joint Ministerial Committee.

Disquiet on the Labour backbenchers is palpable. Several MPs criticised the leadership on Twitter and John Woodcock has submitted an early day motion “unequivocally accepting” Russia’s culpability, which has been signed by close to 20 Labour MPs.

There are even rumours that some frontbenchers are considering resigning in protest at Corbyn’s position.

Might the uneasy truce within Labour, in place since the party’s better than expected performance at the snap general election, be about to come to an end?

News

The White House says it “stands in solidarity” with its “closest ally”, supporting the UK decision to expel 23 Russian diplomats in response to Russia’s refusal to explain how a Russian-made nerve agent was used in the attempted murder of Sergei Skripal in Salisbury. According to Jon Sopel, the BBC’s North American editor, the statement is notable for its unqualified support for Theresa May and language directed at Russia which had not been heard from this White House before.

The UK will be able to sign free trade deals during the Brexit transition period without permission from the EU, according to a report in The Times. Despite the EU’s guidelines stating that the UK will not be able to implement trade deals “unless authorised to do so by the union”, the bloc’s negotiators have privately accepted the UK’s demand that it should be able to pursue an independent trade policy while remaining inside the customs union and single market.

President Trump has admitted making up information in a meeting with Canadian Prime Minister Justin Trudeau. According to audio of a speech he gave at a fundraising speech to donors in Missouri obtained by The Washington Post, Trump said that he told Trudeau the US has a trade deficit with Canada even though he didn’t know if that was the case.

Business & Economy

Airbus, GKN’s biggest customer, has warned that it would be “practically impossible” to give new work to the engineering group were the hostile takeover by Melrose Industries to succeed. Tom Williams, chief operating officer at Airbus, voiced fears that a turnaround specialist would be too focused on the short term. Although he did not name Melrose specifically, it is the only company bidding for GKN.

In a blow to the government, Unilever’s board will today recommend to its shareholders that they vote to choose Rotterdam over London as the location of its new combined headquarters. The Anglo-Dutch company has had a dual structure with two headquarters since British soap producer Lever Brothers merged with Dutch spread maker Margarine Unie in 1930. However, it made a decision to simplify its structure with one primary legal base and headquarters after fending off a hostile takeover by Kraft Heinz.

Toys R Us will close or sell all of its 885 stores in the US over the coming months. This follows the announcement that it will close all of its UK stores in the next six weeks, resulting in 3,000 job losses, with the toy retailer reported as likely to go into liquidation in France, Spain, Poland and Australia too. This is part of a process of closing one fifth of its shops as it attempts to emerge from bankruptcy.

Housebuilder Persimmon has named Roger Devlin as its chairman, confirming news that was first reported Sky News. Devlin is a well known figure in the City who was recently appointed chairman at William Hill. His task will be to rebuild Persimmon’s fractured relationships with shareholders and politicians as it attempts to move beyond the executive pay row which engulfed the company at the end of 2017.

Markets

What happened yesterday?
Global stocks suffered further losses yesterday on the back of the latest upheaval in the Trump administration and continued fears of a global trade war.

In the US, the S&P 500 fell 0.57%, the Dow Jones Industrial Average shed 1% and the Nasdaq was down 0.19%. Meanwhile, in Asia, the Nikkei dropped 0.87% and the Hang Seng was down 0.53%.

Closer to home, the FTSE 100 was 0.09% lower, closing the session at 7,132.69.

Wm Morrison led the losses, shedding 4.86%, despite reporting a 5.8% increase in revenue and a 17% increase in profits, as well as announcing a special dividend of 4p a share in its preliminary results.

Prudential was the day’s biggest gainer, rising 5.07%, following the announcement that the insurer is to split its business and form two companies – M&G Prudential in the UK and Europe and Prudential plc in Asia Africa and the US.

According to Mike Wells, the company’s chief executive, the separation will give M&G Prudential “more control over its business strategy and capital allocation” and “enable it to play a greater role in developing the savings and retirement markets in the UK and Europe”.

“Prudential plc will be able to focus on the attractive returns and growth potential of its market-leading businesses in Asia and the US,” he added.

Mining companies also had a good day, with Antofagasta, Anglo American and Glencore amongst the day’s top five gainers – rising 3.46%, 3.34% and 1.82% respectively.

On the currency markets, the pound gained 0.02% against the dollar at $1.3962 and was up 0.03% against the euro at €1.1288.

Finals
Curtis Banks Group, Cineworld Group, Forbidden Technologies, InterQuest Group, Just Group, Manx Telecom, PJSC Megafon GDR (Reg S), Oakley Capital Investments Ltd. (DI), Old Mutual, OneSavings Bank, Phoenix Group Holdings (DI), Portemeiron Group, PV Crystalox Solar, Spirax-Sarco Engineering, Savills, TMT Investments

Interims
Kier Group

Trading Announcements
Amryt Pharma

AGMs
Banco Bilbao Vixcaya Argentaria SA, Henderson Opportunities Trust, Lonmin, Oxford Biodynamics

International Economic Announcements
(12:30) Continuing claims (US)
(12:30) Import and Export Price Indices (US)
(12:30) Initial Jobless Claims (US)
(12:30) Philadelphia Fed Index (US)

Columns of Note

Ahead of the Russian presidential election, the Financial Times’ Big Read looks at the young technocrats who Vladamir Putin is grooming for a future transition. Although it remains unclear whether Putin will step down in 2024 – in line with the constitution – the political elite expects him to start transforming a system of governance that is overly dependent on him personally.

In The Times, Emma Duncan looks at the “pushmepullyu” nature of UK universities - sitting between the public and private sectors. She argues that students benefit from university education meaning it is right that that establishments are treated as a private entity. She ends by saying that universities that mismanage their affairs by overpaying bosses and not attracting enough students should be allowed to go bust.

Did you know?

The “fact” that the average person swallows eight spiders a year in their sleep is not true. Spiders gain most of the information about their surroundings through vibrations so snoring and breathing usually scares them away, thankfully.

Parliamentary highlights

TODAY

House of Commons

Oral Questions: Exiting the European Union (including Topical Questions)

Business Statement: Business Questions to the Leader of the House – Andrea Leadsom

General Debate: European Affairs – Day 2

House of Lords

Oral Questions

Impact on fashion and design-based industries of the potential loss of European unregistered design rights for UK-generated designs following Brexit - Lord Clement-Jones
Government plans to respond to the National Children’s Bureau report 'Children Missing Education' and their plans to improve the collection of national-level data on such children - Baroness Massey of Darwen
Government plans to support Outdoor Classroom Day - Baroness Miller of Chilthorne Domer
Combating hate speech online - The Lord Bishop of Gloucester

Debate

Debate on the Revised Draft Airports National Policy Statement - Baroness Sugg
The economy in the light of the Chancellor of the Exchequer’s Spring Statement - Lord Bates

Scottish Parliament

General Questions

First Minister’s Questions

Ministerial Statement: Update on South of Scotland Partnership

Members’ Business: S5M-10471 Ivan McKee: Driverless Cars Bringing Transformative Change to Scotland

Stage 3 Proceedings: Offensive Behaviour at Football and Threatening Communications (Repeal) (Scotland) Bill

TOMORROW

House of Commons

Legislation

Refugees (Family Reunion) (No. 2) Bill - 2nd reading - Angus Brendan MacNeil
Unpaid Trial Work Periods (Prohibition) Bill - 2nd reading - Stewart Malcolm McDonald
BBC License Fee (Civil Penalty) Bill - 2nd reading - Sir Christopher Chope
Electronic Cigarettes (Regulation) Bill - 2nd reading - Sir Christopher Chope
Affordable Home Ownership Bill - 2nd reading - Sir Christopher Chope
Hospital Car Parking Charges (Abolition) Bill - 2nd reading - Robert Halfon
Universal Credit (Application, Advice and Assistance) Bill - 2nd reading - Dr Philippa Whitford
Emergency Response Drivers (Protections) Bill - 2nd reading - Sir Henry Bellingham
British Indian Ocean Territory (Citizenship) Bill - 2nd reading - Henry Smith
Domestic Properties (Minimum Energy Performance) Bill - 2nd reading - Sir David Amess
Clean Air Bill - 2nd reading - Geraint Davies
Terms of Withdrawal from EU (Referendum) Bill - 2nd reading - Geraint Davies
Wild Animals in Circuses Bill - 2nd reading - Trudy Harrison

House of Lords

No business scheduled

Scottish Parliament

No business scheduled