18 June 2019


18 June 2019

Good morning,

Right when the Chernobyl disaster seemed far enough in the past to be retold in HBO’s latest feel-terrible hit, memories of nuclear tragedies and human frailty have come back to haunt us.
Only four years ago, Iran agreed a long-term deal on its nuclear programme with the United States, the United Kingdom, France, China and Russia. The agreement – known as the Joint Comprehensive Plan of Action (JCPOA) – came after years of tension over the country’s alleged plans to build nuclear weapons, putting a limit on Iran’s sensitive nuclear activities in return for the lifting of economic sanctions that had cost its economy more than £118bn in oil revenue from 2012 to 2016.
Every party in the negotiations seemed more or less happy with the deal, which saw Iran gain access to more than $100bn in assets frozen overseas and its uranium stockpile reduced by 98% to 300kg – a quantity that wasn’t supposed to be exceeded until 2031. Two years later, reports confirmed that the JCPOA had managed to cut off all of Iran’s possible paths towards a nuclear bomb, even when controversies around bits of the agreement persisted.
Tension was contained until US President Donald Trump decided to pull out of the deal in May 2018 and reimpose sanctions on Iran and its trade partners later that year – a move then opposed by the UK, Germany and France. In response to US penalties, Iranian President Hassan Rouhani suspended commitments under the 2015 nuclear deal and threatened to resume production of ‘more-highly-enriched’ uranium in 60 days if the European Union and other signatories failed to protect Middle Eastern country from Washington’s sanctions.
With the US and Saudi Arabia now accusing Tehran of the recent attacks on tankers in the Strait of Hormuz, Iran warned on Monday that uranium stockpiles would exceed the levels agreed under the JCPOA in 10 days, putting extra pressure on signatories to save the deal. Although UN sanctions remain lifted, they could be reinstated for 10 to 15 years if the country violates any aspect of the deal.
Meanwhile, the US Pentagon said hours after Iran’s warning that it would deploy 1,000 additional American troops in the Middle East ‘to ensure the safety and welfare of our military personnel working throughout the region and to protect our national interests’, amid rising tensions.
In a time when China, India and Pakistan are reportedly increasing the size of their nuclear arsenals and North Korea’s nuclear tests are felt across its borders, the failure of agreements like JCPOA seems to remind us of how powerful deterrence and coercive politics remain. The spectre of the Chernobyl era isn’t entirely gone after all. 


Former Egyptian president Mohammed Morsi died yesterday aged 67 after collapsing during a court session in which he was being tried on charges of espionage. The former president’s younger son had shared his concerns over his father’s prison conditions, with Morsi allegedly being held under solitary confinement and denied medical treatment. Morsi was overthrown by the army in 2013 following mass protests a year after becoming Egypt’s first democratically elected leader.
Conservative MPs will cast secret ballots to eliminate at least one of the remaining six Tory leadership hopefuls this afternoon. The voting could see more than one candidate leave the race, as any contender receiving fewer than 33 votes will be forced out of the contest. The results will be announced ahead of a televised debate between the candidates on the BBC tonight, in which frontrunner Boris Johnson has agreed to participate.
recent photo taken by scientist Steffen Olsen in Greenland shows the massive amounts of ice lost in the northwest part of the island, confirming predictions of a record year for melting on the Greenland ice sheet. The picture depicts sled dogs making their way through the usually flat white sea ice with their paws in melted water. The scientific community has insisted the major effect of this on sea level rise, which could eventually drive millions of people living in coastal locations from their homes.

Business & Economy

Sotheby’s will return to private ownership after 31 years as billionaire Patrick Drahi agreed to acquire the company in a $3.7bn deal. The Franco-Israeli entrepreneur, founder of telecoms group Altice, will pay $57 per share (61% more than its recent closing price), through his BidFair holding company to buy the auction house’s common stock. With this transaction, Sotheby’s joins rival Christie’s in being owned by a French billionaire. (£)
Chancellor of the Exchequer Philip Hammond said that the UK is aware of the risks faced by sensitive areas of the British economy from international investment, especially from China in areas like energy infrastructure and telecoms. Despite American concerns amid bitter trade relations between the US and China, the UK is pushing for closer cooperation with China as London plans to open up deals for companies in the two countries worth over £500m. The chancellor insisted that Britain is capable of protecting its national security and still strengthen economic ties with Beijing.
Heathrow Airport launched a consultation on the ‘preferred masterplan’ to open a third runway by 2026. Over 12 weeks, stakeholders will be able to share their ideas on the future layout, roads and environmental impact management. Ahead of the consultation, the Airport said that it was working on a noise insulation policy, property compensation, a community fund to assist neighbours residing nearby and measures to minimise air pollution and climate emergency. 


What happened yesterday?

London stocks were slightly higher on Monday, with policy announcements by central banks due this week. By close of trading, the FTSE 100 was up 0.16% at 7,357.31, alongside a decrease of 0.21% in the price of sterling against the US dollar at $1.25 and 0.39% on the euro at €1.12.
The pound is expected to continue to weaken if Conservative favourite Boris Johnson becomes UK prime minister, given his unpopularity in Brussels and willingness for a no-deal Brexit. At the same time, the Bank of England, the Bank of Japan and the Federal Reserve all plan to make policy announcements this week after a fortnight in which hopes of policy easing have driven a stock market recovery from losses in May.
In corporate news, Royal Bank of Scotland’s stocks (up 0.85%) rose after it said that the merger between Alawwal Bank and Saudi British Bank would raise its capital. Babcock (up 1.46%) was also amongst the risers as it confirmed that it had turned down a takeover approach from rival Serco in January.
Airlines closed in the red, with EasyJet (down 4.37%), International Consolidated Airlines Group (down 2.19%) and Wizz Air (down 2.59%) all lower following Lufthansa’s downgrade in its 2019 profit outlook, as competition from low-cost carriers intensifies. Construction group Kier’s shares (down -17.43) plunged as it announced a cut in approximately 1,200 jobs aimed at minimising debt and delivering £55m in annual cost savings from 2021. British American Tobacco (down 1.58%) also went down after being downgraded to ‘underweight’ at Morgan Stanley.
Across the pond, gains in real state and energy gave the S&P 500 a 0.1% boost, with materials and utilities amongst the standout losers. The technology sector helped the tech-heavy Nasdaq Composite climb 0.6%, supported by gains over 4% for Tesla and Facebook. In the meantime, the US Federal Reserve’s policy statement is expected to go out on Wednesday.

What's happening today?

Ashtead Group
NextEnergy Solar Fund Limited Red
TechFinancials (DI)
Telecom Plus

Safestore Holdings
Schroder European Real Estate Investment Trust

Ascent Resources
Andrews Sykes Group
CEIBA Investments Limited NPV
Coca-Cola HBC AG (CDI)
Clearstar Inc. (DI)
Directa Plus
Global Ports Investments GDR (REG S)
Horizon Discovery Group
Plus500 Ltd (DI)
Rosenblatt Group
Savannah Resources

Int. Economic Announcements
(07:00) Producer Price Index (GER)
(10:00) Balance of Trade (EU)
(10:00) Consumer Price Index (EU)
(10:00) ZEW Survey (EU) - Economic Sentiment
(10:00) ZEW Survey (GER) - Current Situation
(10:00) ZEW Survey (GER) - Economic Sentiment
(13:30) Building Permits (US)
(13:30) Housing Starts (US)

Source: FTSE 100, Financial Times

Columns of Note

In The TimesRachel Sylvester argues that the next Conservative leader needs to look at the country and appeal to ethnic minorities if he wants to win an election. According to the think tank BritishFuture, the Tories would have won an additional 28 seats and secured a majority in 2017 if they had closed the ethnic minority gap. Sylvester warns that, despite the Tory preference for Boris Johnson, the Conservative frontrunner has alienated many others, with 10% fewer women than men seeing him as a good prime minister. She concludes that, as the Tory leadership race becomes more unrepresentative, Rory Stewart seems to be the only hopeful reaching beyond the party’s base. (£)
Shadow Justice Minister Yasmin Qureshi argues in The Guardian that the EU has enabled Islamophobia by aiding and abetting Myanmar’s Aung San Suu Kyi and Hungary’s Viktor Orbán, and being ineffective in its response to growing anti-Muslim prejudice across the Union. In light of EU member states’ discriminatory legislation against Muslims on clothing, citizenship and food, Qureshi calls for the UK to work within the EU to fight extreme nationalism and reinforce the values of freedom and diversity. 

Cartoon source: The Telegraph

Did you know?
Until 1858, British passports were written in French, as passage in and out of Britain was mostly via the Channel ports (@qikipedia)

Parliamentary highlights

House of Commons
Oral questions
Health and Social Care (including Topical Questions)
Ten Minute Rule Motion
Domestic Energy Efficiency Plan - Sarah Newton
To approve an Ecclesiastical Measure relating to Church Representation and Ministers - Dame Caroline Spelman
To approve a Statutory Instrument relating to the draft Safeguarding Vulnerable Groups Act 2006 (Specified Scottish Authority and Barred Lists) Order 2019 - Sajid Javid
Backbench Business
Progress of Implementation of the Recommendations of the Cox Report - Mrs Maria Miller, Jess Phillips
Bank holidays in 2020 - Derek Thomas
House of Lords
Oral questions
Consultation on the mandatory fortification of flour with folic acid to help prevent foetal abnormalities - Lord Rooker
Reviewing the principles of government outsourcing to the private sector, particularly in regard to justice matters - Lord Wallace of Saltaire
Government definition of “safe” in relation to chemicals, medicines and vaccines - The Countess of Mar
Protection of UK and other merchant shipping in the Gulf of Oman and Strait of Hormuz subsequent to recent attacks - Lord West of Spithead
Census (Return Particulars and Removal of Penalties) Bill [HL] – Report - Lord Young of Cookham
Orders and regulations
Children’s Homes etc. Inspection Fees, Childcare Fees, Adoption and Children Act Register (Amendment) Regulations 2019 - Motion to regret - Lord Russell of Liverpool
Short debate
Cadet Expansion Programme in schools and steps taken to encourage growth of cadet units in all three services - Lord Lingfield
Scottish Parliament
Time for Reflection
Father Mark Kelly, Parish Priest, The Parish Communities of Our Lady's (Beith), St. Brigid's (Kilbirnie) and St. Palladius (Dalry)
Ministerial Statement
Cycling Action Plan for Scotland
Stage 3 Proceedings
Planning (Scotland Bill)
Committee Announcements
Members’ Business
S5M-17435 Maurice Corry: Unforgotten Forces Consortium
House of Commons
Oral questions
Prime Minister's Question Time
Ten Minute Rule Motion
Nuclear Submarine Recycling (Reporting) - Luke Pollard
Parliamentary Buildings (Restoration and Renewal) Bill: remaining stages
Use of algorithms in Home Office visa processing - Chi Onwurah
House of Lords
Oral questions
Quality of careers advice in schools - Baroness Pidding
Findings of the report of the UNs Special Rapporteur on extreme poverty and human rights - Baroness Janke
Resources at the UK’s borders to prevent illegal arms and illicit drugs entering the country and whether they need to be increased when the UK exits the EU - Lord Harris of Haringey
Wild Animals in Circuses (No.2) Bill - Second reading - Lord Gardiner of Kimble
International Widows Day 2019 and steps to empower widows in developing countries - Lord Loomba
Scottish Parliament
Ministerial Statement
The Scottish Government’s Response to the Expert Review of Mental Health Services for Young People Entering and in Custody at HMP and YOI Polmont
Stage 3 Proceedings
Planning (Scotland) Bill
Members’ Business
S5M-15977 Kenneth Gibson: Protecting Children and Young People from the Marketing of Health-harming Products