16 November 2018

Scott Reid

16 November 2018

Good morning,

It’s official: Theresa May now holds the record for leading the most dangerous administration in modern history (and no, not in the George Osborne "chopped up in bags in my freezer" sense of the word).

Instead, after a day which saw six resignations in response to the prime minister’s Brexit deal – and with more rumoured to follow today - May has now ousted Gordon Brown for the lead in the number of resignations/non-reshuffle sacking from her cabinet just over 500 days into her premiership.

Commentators suggested May could have deflected an expected resignation by work and pensions secretary Esther McVey. Less so, the minister overseeing her government’s raison d’etre - Brexit secretary Dominic Raab.

But as the day went on and her in-tray filled with resignation letters, the prime minister looked increasingly constrained. As The Times journalist Sathnam Sanghera commented on Twitter, one upshot was learning of more Asian Tories than we’d previously been aware .

The day’s highlight, perhaps, was revealed this morning by The Times. Michael Gove who – for now stopping short of a walk-out –  rejected the prime minister’s offer of taking on the role of Brexit secretary just 15 minutes before she went live to camera in Downing St yesterday evening. (Hmmm. Now, why does that sound familiar? )

As the atmosphere in Westminster remains febrile, it would be a fool’s errand to guess what comes next. But what we don’t know might actually play out in the prime minister’s favour.

We don’t know, for example, how many of the 48 letters of no-confidence required by the 1922 Committee to trigger a leadership challenge have been submitted beyond those of Jacob Rees-Mogg and his close circle. We don’t know what deal (if any) could be negotiated should a Brexiteer candidate win a leadership challenge. And we don’t know how many MPs would be willing to go public with their intention to throw the UK over the cliff-edge should no-deal emerge as the only alternative to May’s offer.

May might be weakened, but many had written off her chances long before now.

News

A Saudi Arabian government investigation has concluded there was no involvement of the Crown Prince Mohammed bin Salman in the killing of journalist Jamal Khashoggi. According to the Office of the Public Prosecutor, five main culprits have been found guilty, who have now been recommended for execution. Saudi officials also suggested that an original “hit squad” of 15 men was only sent to Istanbul to persuade Khashoggi to return voluntarily to Riyadh. (£)

Julian Assange has been revealed to have been charged in the US following a “cut-and-paste error”, the Guardian reports. The indictment of the Wikileaks founder for unspecified offences was accidentally revealed in a prosecutors’ court filing yesterday, after the document was apparently unsealed in error. According to the filing which Wikileaks tweeted yesterday, federal prosecutors had hoped to keep the charges against Assange secret so he would “no longer evade or avoid arrest and extradition.”

More than 600 people are now recorded as missing following what is expected to be California’s deadliest-ever wildfire. Officials have attributed the high number of expected casualties to huge wind speeds that drove flames in the so-called Camp Fire through the town of Paradise in northern California, where more than 27,000 live.

Business & Economy

Facebook has fired its American-based communications consultancy following accusations that it attempted to smear billionaire investor George Soros on Facebook’s behalf. Definers Public Affairs, a Republican-leaning agency was reported by The New York Times as having briefed journalists on false financial connections between the Soros family and the Freedom from Facebook pressure group. On Thursday, Facebook denied paying Definers to write articles on its behalf, but admitted it knew of the agency’s investigation into funding links. (£)

Paul May, the chief executive of Patisserie Valerie, has resigned following a fraud inquiry investigating a multimillion-pound hole in company finances. The company’s statement offered no word of thanks or tribute to May, who had led it over 12 years. He has been replaced by an internal senior executive, Steve Francis, with immediate effect.

Sky News reports that William Chalmers, a senior banker at Morgan Stanley, has pulled out of the race to be the next chief finance officer of Royal Bank of Scotland. The outlet reports that the decision clears ground for RBS to appoint its interim finance director, Katie Murray, to the post on a permanent basis although the recruitment process is formally ongoing. Chalmers had been considered the favourite to assume the RBS CFO role in 2020, boasting strong relationship with RBS’ largest shareholder – UK Government Investments.

Markets

What happened yesterday?

As Brexit chaos engulfed Westminster yesterday, losses in the value of the pound made for muted gains in some stocks on the London market. The FTSE 100 finished flat, up just 0.06% at 7,038.01 points, whilst the pound nosedived - down by 1.9% on the dollar at $1.28, and by 2.0% on the euro at €1.13.

As the pound dropped and investors sought safe havens, the yield on the benchmark 10-year Gilt slipped 13 basis points to 1.38%.

Domestic stocks took on the worse of the political fall-out on the stockmarket, with falls suffered across housebuilding, retail and banking sectors. RBS was down 9.6%, Persimmon down 7.4%, Bovis down 7.2% while Countryside lost 9.7%. Banks with a smaller reliance on the UK including HSBC (up 2.11%) and Standard Chartered (up 1.64%), however, finished in positive territory.

In non-Brexit related market news, Royal Mail (down 6.49%) fell as the postal service reported revenues up one per cent but a 25% decline in operating profits for the first half of the year.

Q3 Results
Afarak Group (DI)
 
Trading Announcements
Regional REIT Limited
 
AGMs
Eagle Eye Solutions Group
Kier Group 

GMs
Ranger Direct Lending Fund
 
Intl. Economic Announcements
(07:00) Wholesale Price Index (GER)
(10:00) Consumer Price Index (EU)
(14:15) Capacity Utilisation (US)
(14:15) Industrial Production (US)

Columns of Note

Fraser Nelson writes in the Telegraph that Theresa May has gambled on her potential opponents failing to come up with a credible alternative to her Brexit deal. Nelson comments that her party may be furious, but May has spent much of her time in office “putting out fires” within the cabinet and is well used to waiting her would-be competitors out.

Jim Armitage comments in the Evening Standard that Alison Rose is the right successor to Ross McEwan as chief executive of RBS. He notes that although the board’s ambition may lead it to assemble a high-profile list of (potentially all-male) external runners for the position, Rose’s candidacy offers continuity at a time when RBS’ imperative should be to finish a strategic overhaul started nearly ten years ago that would see it renewed as a domestic-facing bank.

Did you know

There is only one pig in Afghanistan. His name is Khanzir and he lives in the Kabul Zoo.

Parliamentary highlights

TODAY

House of Commons

No business scheduled.

House of Lords

No business scheduled.

Scottish Parliament

No business scheduled.