17 January 2019

Scott Reid

17 January 2019

Good morning,

As the comedian Milton Jones put it to Twitter yesterday, “I am in favour of the Norway option. That we all go and live in Norway.”
And you know what? His is probably as erudite a comment as we’re going to get right now. Whilst Westminster continues to tear itself apart, I’m seeking solace from our comedians who seem to have a better grasp on the pulse of the nation than our politicians do.
Home and dry after winning a confidence vote of 325-306 in the House of Commons last night, the prime minister made a bold offer from the steps of Downing Street to open her door to any opposition party willing to find a joint solution on the way forward. It was an irony not lost on those watching that she did so in front of a firmly shut door.
Jeremy Corbyn refused to join any talks unless the prospect of the UK leaving the EU with no deal was taken firmly off the table. Not for the first time for the prime minister, she may be damned if she does, and damned if she doesn’t. Every Labour vote for some sort of customs union, access or membership of the single market may be just what she needs to get Brexit over the line. But removing no deal as an option would almost certainly mean losing the support of her Brexiteer backbenchers, which could well split her party.
Business seems convinced that the latter option is far more likely than the former, helped, no doubt, by a teleconference hosted by the Chancellor yesterday. Speaking to the UK leaders of Tesco, Amazon, the CBI and an array of its members, the Chancellor is reported to have revealed the possibility (and indeed, process) that parliament might take to stop no deal and even rescind Article 50. If you look at sterling alone, a soft Brexit or no Brexit now looks factored in.
All of which suggests that Jones, quoted above, could be onto something.
It may be a fool’s errand to predict where we all go from here. Which seems appropriate because the only achievement of this week’s charades in Westminster so far, is to make fools of us all.


Scientists at Switzerland’s Large Hadron Collider have announced £21 billion plans for the largest experiment ever conducted to find a “theory of everything”. As part of the experiment, a successor 100km-long circular tunnel would be built under the Swiss-French border, which, at four times larger than the LHC, would be aimed at understanding the fundamental constituents of the universe more accurately, including the behaviour of gravity, and matter vs. anti-matter. (£)
The housing market is set to perform at its slowest in 20 years, the latest monthly report by the Royal Institution of Chartered Surveyors (RICS) has suggested. According to the report, a net balance of 28% of RICS members expect sales to fall during the next quarter – its most pessimistic reading since October 1998. 19% reported seeing price falls rather than rises across every region of the UK.
At least 21 people have been killed after Somali militants attacked a luxury hotel in Nairobi, Kenya’s government has confirmed. 28 have also been admitted to hospital, with 19 still missing, after the militants stormed the DusitD2 hotel and business complex on Tuesday. President Uhuru Kenyatta has said the 19-hour security operation ended after the five jihadist attackers were “eliminated”.

Business & Economy

German authorities have begun to wargame a potential merger of Deutsche Bank and Commerzbank, the FT reports. According to a source close to discussions, Olaf Scholz, Germany’s finance minister and vice-chancellor, has asked the country’s banking regulator BaFin to share the results of scenario analyses of a merger, which may lead to further consolidations in the sector. (£)
The FT also reports that Tim Davie, chief executive of BBC Studios, has turned down an offer to lead the English Premier League. English football’s lead body was last week riven by the decision of Susanna Dinnage, a senior executive at Discovery TV, to withdraw her candidacy for the position of chief executive which sources also suggest was offered to Davie in November. Richard Masters, currently managing director at the league, is acting as interim chief executive until a permanent successor to 19-year leader, Richard Scudamore, can be found. (£)
The UK inflation rate fell to 2.1% in December – its lowest in nearly two years. According to a the latest Consumer Prices Index (CPI), the figure was down from 2.3% during November due to a mix of lower prices for clothing and petrol. The figure continues to outstrip average UK pay growth, however, which the most recent reading in October showed that wages (excluding bonuses) grew by 3.3% in the previous three months.


What happened yesterday?

The London market had a mixed day as political uncertainty was balanced by hopes of a Brexit delay and a strong performance in the housebuilding sector. By close of play, the FTSE 100 was down 0.47% or 32.34 points at 6,862.69 points, while sterling was trading down 0.22% on the dollar at $1.29 and up by 0.07% on the euro at €1.13.
An analyst at AJ Bell commented on parliament’s rejection of the Withdrawal Bill, suggesting that the market now  “believes we are going to get more time for negotiations”; it thinks we are “less likely like to have a hard… Brexit, or that [it] won’t happen at all.” As such, volatility on both the currency and stock markets will be the order of the day for months to come.
In corporate news, housebuilders were the day’s top gainers, including Bovis Homes on the FTSE 250 (up 3.82%) after announcing it expected profits for 2018 to be “slightly ahead” of market expectations. In the top-flight index, Taylor Wimpey (up 5.64%), Persimmon (up 5.41%) and Barratt Developments (3.91%) were all up as optimism spread through the sector.
The day’s standout loser was education publisher Pearson, which fell 5.98% after saying it expects full-year profits to come in just above the middle of its target range and guiding to growth of 8-18% for 2019, and lowering expected operating profit down by £20 million.

Chemring Group
Trading Announcements          
Associated British Foods
Brown (N.) Group
DP Eurasia N.V. (DI)
4Imprint Group
Game Digital
Premier Foods
Rio Tinto
Sage Group     
Ten Entertainment Group

UK Economic Announcements
(00.01) RICS Housing Market Survey

Q1 Results
SSP Group

Q3 Results
Brown (N.) Group
Premier Foods
Q4 Results
Rio Tinto

Aberdeen Standard Asia Focus
Aberdeen Standard Equity Income Trust
Cardiff Property
Game Digital
Int. Economic Announcements
(07.00) Wholesale Price Index (GER)
(10.00) Consumer Price Index (EU)
(13.30) Continuing Claims (US)
(13.30) Initial Jobless Claims (US)
(13.30) Philadelphia Fed Index (US)

Columns of Note

In The National, Andrew Wilson writes in favour of the legalisation of cannabis. He predicts that organised crime will be a key challenge for the present – and coming – generation, and which could be undermined by extending regulation to drugs, which remain its biggest funding source. Although the devolution settlement remains an obstacle to the decriminalisation of marijuana consumption in Scotland, Wilson concludes that we will be on the right side of history to wake up to its potential benefits, which include the reinvestment into society of potential annual tax proceeds above £100 million.
Philip Stevens comments in the Financial Times that the prime minister’s offer to work across party lines over Brexit must be her last throw of the dice. He suggests her original sin was to carve out the government’s red-lines by pandering to hardline Brexiteers in autumn 2016, creating a parliamentary logic and electoral arithmetic which have led to the current deadlock. He suggests this is a crisis that calls for a prime minister, and not a party leader, running against her record of the previous two years. (£)

Did you know?

During the men’s marathon at the 1904 Summer Olympics in St. Louis, there were only two places where athletes could drink fresh water, because the organisers of the games wanted to study the effects of dehydration.

Parliamentary highlights


House of Commons
Oral questions
Environment, Food and Rural Affairs (including Topical Questions)
Church Commissioners, the House of Commons Commission, the Public Accounts Commission and the Speakers’ Committee on the Electoral Commission
Business Statement
Business Questions to the Leader of the House
Select Committee Statement
Fourteenth Report of the Environmental Audit Committee on sustainable seas, HC 980
Backbench Business
Debate on a Motion on Mental Health First Aid in the Workplace – Luciana Berger, Norman Lamb and Johnny Mercer
Debate on a Motion on Children’s Social Care in England – Tim Loughton
Awareness of fetal alcohol spectrum disorder – Bill Esterton

House of Lords
Oral questions
Encouraging the teaching of art and design in schools – The Earl of Clancarty
Impact of Brexit on the rights of consumers who purchase goods from the EU – Baroness Wilcox
Improvement of railway services across the Pennines - Lord Greaves
Impact on the UK’s future energy by any decision from Hitachi to withdrawal from the Wylfa Newydd nuclear project and Toshiba’s withdrawal from the Moorside project – Lord West of Spithead
Possible effects of Brexit on the stability of the Union between the parts of the UK
Relationship between the use of digital technology and the health and wellbeing of children and young people – Baroness Kidron
Short Debate
Legislation necessary to enable a further referendum on the UK’s membership of the EU – Lord Tyler

Scottish Parliament
General Questions
First Minister’s Questions
Members’ Business
Fairer Hospital TV Charges – Edward Mountain
Scottish Government Debate
Celebrating the Role of Credit Unions in Scotland’s Communities

House of Commons
No business scheduled

House of Lords
Civil Partnerships, Marriages and Deaths (Registration Etc.) Bill – Second reading – Baroness Hodgson of Abinger
Stalking Protection Bill – Second Reading – Baroness Berting
Parking (Code of Practice) Bill – Second Reading – Lord Hunt of Wirral
Scottish Parliament
No business scheduled