21 Aug 2018

Daisy Penman

21 Aug 2018

Good morning, 

Jeremy Hunt, the UK foreign secretary, will reportedly urge President Trump today to impose wider economic sanctions against Russia and determine new rules to protect the legitimacy of democratic elections - specifically higher regulation for online political advertising and new measures to prevent cyber attacks on electoral machinery. Hunt will be speaking in Washington at his first visit to America as the UK’s most senior diplomat, having taken over from Boris Johnson last month.

It has also been reported that Hunt will delicately bring up Trump’s election success, suggesting that the phenomenon of fake news may have contributed to the President’s victory. 

Since the election of 2016, Trump has continued to praise the electoral college system of American democracy that allowed him to win the presidency despite not gaining the majority of votes cast. He has referred to the system as “actually genius”since winning, and mentions often that Hillary wasn’t able to win the electoral college.

However, Trump may wish to listen to the advice of his wife, Melania, who has issued a warning over the “destructive and harmful” effects of social media; in 2012 Trump tweeted repeatedly about the system that would go on to elect him. The most memorable of these tweets may be “The electoral college is a disaster for democracy.” 

It’s clear that Trump’s election results are a pressure point for him, so for Jeremy Hunt to question whether the vote was legitimate could be a dangerous game for the special relationship.

News 

The Times is reporting that a Quaker trust in Northern Ireland is responsible for recent gun and bomb attacks in the country. The charity, Conflict Resolution Services issue of sIreland (CRSI), have had their offices raided by counterterrorism police twice and one of its employees lost his job after he was charged with directing terrorism. They have been accused of having close links with Oglaigh na hEireann (ONH), an “active and dangerous” dissident terrorist group, and the charity has received more than £385,000 from the Joseph Rowntree Charitable Trust.

NHS Providers, the association of NHS trusts, has warned that hospitals may see a drop in the amount of pharmaceutical drugs supplied in the event of a no-deal Brexit. Chris Hopson, the group’s chief executive, wrote in a letter to the heads of NHS England and NHS Improvement that “public health and disease control co-ordination could also suffer.” This comes as Theresa May is still resisting pressure to guarantee EU citizens full access to the health service in the event of a no-deal, despite recent leaked papers suggesting the Cabinet is keen to do so.

The Pope has vowed to tackle the issue of sexual abuse in the Catholic Church in a rare letter to “all Catholics”. Pope Francis admitted that the church had not implemented reform as quickly and efficiently as it should, and he promised that victims’ stories would be heard and the historical nature of many of the crimes would not prevent the Church from taking action. The letter, which was published on Monday, was written in response to a grand jury which found that more than 1,000 children had been abused by 300 Catholic priests in Pennsylvania over the past 70 years.

Business & Economy 

British online luxury fashion retailer Farfetch has chosen to float on the American stock market,disappointing many at the London Stock Exchange. The company was founded in 2007 by Portuguese entrepreneur José Neves and its site connects high-end boutiques and brands with their target market. It is based in Shoreditch, London, and has raised more than $700 million from investors, including a Russian billionaire who was an early investor in Facebook and Twitter. The flotation could value the company at as much as $5 billion. 

Liam Fox, the secretary for international trade, has announced a plan to increase British exports from 30% to 35% of GDP, but he has not specified a time limit or committed to new funds. The new measures will include providing more information online, announcing ministers’ plans to travel overseas - which will allow companies to use their visits to their advantage - and introducing a new type of loan via UK Export Finance, which currently commits only £22 billion of its £50 billion available.

A dispute between XPO Logistics, who operate House of Fraser’s warehouses, and Mike Ashley, who now owns the department stores, could put more than 600 jobs at risk. Ten days after House of Fraser fell into administration, XPO has begun a redundancy consultation with the 627 employees in the Milton Keynes and Wellingborough warehouses that supply the retailer’s stores and carry out the online orders. The dispute comes as Ashley says he will not pay any debts that were accumulated prior to his takeover, including the £30 million that House of Fraser owe XPO. 

Markets 

What happened yesterday?

The week started optimistically for global stocks as markets focused their hopes on a favourable outcome to trade talks between China and the US this week. It was reported at the end of last week that both sides were making progress but there were few details released other than the suggestion that negotiators were aiming for a meeting between President Trump and Xi Jinping in November. 

The S&P 500 continued to rise back towards its record high of last January, as gains for energy stocks offset a weak display from the technology sector. The Turkish lira fell another 1.5% after S&P Global and Moody’s both lowered Turkey’s debt rating, however it stayed above the record low it struck against the dollar last week.

The dollar was down against both the euro and the yen, with US Treasury yields falling as markets await the minutes of the Federal Reserve’s last meeting. The FTSE 100 closed up 0.43% at 7,5921.26 and the Dow Jones also finished up by 0.35% at 25,758.69.

Finals
BHP Billiton

Interims
Charter Court Financial Services Group
Empiric Student Property
Hostelworld Group
Persimmon
Wood Group

AGMs
Albion Enterprise VCT
Henderson Diversified Income Ltd

GMs
Micro Focus International

UK Economic Announcements
(9:30) Public Sector Net Borrowing
(11:00) CBI Industrial Trends Surveys

Columns of Note 

In The Guardian, Larry Elliott is skeptical of international trade secretary Liam Fox’s plan to increase exports as a share of GDP by 5%. Elliott looks at previous plans to increase export targets for the UK and remembers their failures - specifically the 2015 plan to double exports to £1 trillion a year by 2020, which was soon scrapped. He argues that if the government wants the UK to be as competitive and formidable an exporter as Germany it needs to focus more on the quality of the goods and services it is exporting, rather than the strategies for exporting them. 

In The Times, Rachel Sylvester argues that the school system has lost its way. In anticipation of this year’s GCSE results, the first with the new 1-9 grading system that has replaced the traditional A*-G, she looks at how schools are able to doctor their results in order to climb the national league tables. There have been reports of schools encouraging students to drop subjects they aren’t guaranteed the best results in and even some cases of pupils being asked to leave their school altogether; Sylvester says that this “undermines the true purpose of education”.

Did you know?

On New Year’s Eve 2009, 1,400 people stayed in Airbnbs across the world. On the same night in 2017, over 3 million people did so.

Parliamentary highlights 

House of Commons
In recess until 4 September 2018
 
House of Lords
In recess until 4 September 2018
 
Scottish Parliament
In recess until 4 September 2018