22 March

Susan Arthur

22 March

Prior to beginning a speech on Brexit last night, University of Glasgow principal Professor Anton Muscatelli looked at the audience and joked: “It’s a good crowd. They’re probably all wanting me to give them answers, but…” he shrugged his shoulders.

It was a good crowd — the venue had to be changed after the original, smaller venue sold-out within four hours of ticket bookings opening — an indication of how many people are looking to understand the implications of Brexit.

The speech may not have delivered answers but it did paint a bleak picture of the economic risks to the UK of a “cliff-edge Brexit”, which would see the UK exit the EU without an agreement and reverting to World Trade Organisation rules, which some estimates suggest could cost the UK economy as much as 9.4 per cent of GDP by 2030.

Professor Muscatelli explained that the other option is a “European Single Market Brexit”, which has seemingly been ruled out but could come back into play at least as a transitional measure. This would involve serious political costs for the UK Government but Muscatelli believes it may be the only way the Prime Minister can avoid a hard Brexit.

One of the first steps in the negotiation will be the “divorce bill”. Normally in a negotiation this would be settled first, but the UK government wants to negotiate this in parallel. The Telegraph reports today that leaked papers reveal Britain will be threatened with court action if it tries to walk away without paying the £50 billion bill it owes. However, UK government lawyers have advised Theresa May that Britain could leave without paying.

This is only the first step in a lengthy negotiation. What happens with the divorce bill may set the tone for the rest of the negotiations and show who has the upper hand and a stronger bargaining position.


Most newspapers today lead with news of the aircraft cabin ban on large electronic devices in the UK and US, after yesterday’s editions indicated that the announcement was expected during the day. We now know that the ban was prompted by intelligence suggesting a terror threat to US-bound flights, and that the ban will affect passengers travelling to the UK and US from Middle Eastern and north African countries. The measure will hit the operations of the big three airlines that have extensive operations between the US and the Gulf.

Workers on Southern, Merseyrail and Arriva Trains North are to hold fresh strikes on 8 April, the day of the Grand National. The RMT union has planned the 24-hour industrial action as part of its response to an ongoing dispute over the role of conductors on trains.

The Scottish Parliament will vote later today on whether to back the Scottish Government’s plans to ask Westminster for a Section 30 order for a second independence referendum. The government is expected to win the vote with the support of the Scottish Green Party.

A Reputation Institute survey reports that corporate governance is having a bigger impact on company reputation than every before. According to the report, companies having a broader positive influence on society has become the third biggest influence in consumer decision making. A UK government white paper on corporate governance is due out within a few weeks.

Business & Economy

UK inflation jumped to 2.3% in February, up from 1.8% in January. Rising food and fuel prices pushed inflation up to the highest rate since September 2013, and the rate is now above the Bank of England’s two per cent target. If inflation continues to rise faster than expected, the Bank could feel further pressure to raise interest rates sooner rather than later.

Global fund managers believe stock markets are more overvalued today than at any time this century, but they continue to buy equities aggressively nonetheless. A Bank of America survey of investors for March shows that a net 34 per cent of funds believe that global stocks have risen too much, much higher than the days before the financial market crash in 2008. Investors are concerned that rising interest rates could trigger the next bear market. (£)


Markets took a hit yesterday, suffering their worst falls since the election of President Trump. Worries about the US president’s pro-business agenda triggered a flight to safety, with US markets leading the drop.

The benchmark S&P 500 index fell 1.2 per cent, breaking a run of 109 trading days without a drop of one per cent or more. Asian markets followed suit, while gold, a typical safe haven, rose one per cent over the US day to its highest in almost three weeks.

In the UK, sterling rose to a high of $1.2474 against the US dollar to reach its highest point since the end of February as data on inflation was released.

Cello Group, EG Solutions, Ferrexpo, Kingfisher, Quixant, Savills, Xaar

Haydale Graphene Industries, Softcat

CC Japan Income & Growth Trust, RM, Safestore Holdings, Blackrock Thorgmorton Trust

Int. Economic Announcements
(10:00) Current Account (EU) 
(11:00) MBA Mortgage Applications (US) 
(13:00) House Price Index (US) 
(14:00) Existing Home Sales (US) 
(14:30) Crude Oil Inventories (US)

Source: FTSE100, The Financial Times

Columns of Note

During Monday’s Intelligence Committee hearing on Russia’s role in the US election, President Trump’s tweets reacting to the proceedings were read out and used as part of the questioning process. Speaking to Fox News in an interview last week, Trump said: “Much of the news… it’s not honest. And when I have close to 100 million people watching me on Twitter…. I have my own form of media”. The Atlantic discusses how the President uses twitter as an active publisher of news himself and reflects on the implications of that.

Tributes have been paid to Martin McGuinness — a man with a divisive legacy. On Reaction, Walter Ellis recalls meeting McGuinness as a young journalist on the day after Bloody Sunday. Ellis believes that although McGuinness was responsible for some terrible acts of violence, he also became a different person in later life. Offering a counter view, Iain Martinargues, also on Reaction, that we should not forget that McGuinness was a terrorist: “he was canny but spare us the idea he was some kind of hero”.

Cartoon Source: The Telegraph

Did you know?

The creator of Inspector Morse, Colin Dexter, first imagined his famous detective while on a rainy holiday with his family in Wales in 1972. Dexter was bored of the novel he was reading and decided he could do better. Dexter passed away yesterday at the age of 86.

Parliamentary highlights


House of Commons
Oral Questions 
Cabinet Office and Chancellor of the Duchy of Lancaster, including Topical Questions

Prime Minister’s Questions

Exiting the European Union and global trade

House of Lords
Digital Economy Bill — Report stage (day 3) — Lord Ashton of Hyde

European Union Committee
Oral Evidence Session: David Davies MP, Secretary of State for Exiting the European Union, Department for Exiting the European Union

Scottish Parliament
Continuation of Scottish Government Debate: Scotland’s Choice

House of Commons

Select Committees

Exiting the European Union — Oral Evidence Session: The UK’s negotiating objectives for its withdrawal from the EU

House of Lords
Homelessness Reduction Bill — 3rd reading — Lord Best

Science and Technology Select Committee report: ‘A time for boldness: EU membership and UK science after the referendum

Scottish Parliament
First Minister’s Questions