24 November


24 November

Good morning,

Retailers will be hoping for a boost today as shoppers flock to high streets across the country in search of “Black Friday” bargains. The sales, which originated as a post-Thanksgiving tradition in the US, have been increasingly embraced in the UK over the last few years. Any excuse to hit the shops, eh? Thankfully, carrying a taser to the sales appears to be an American habit that is yet to cross the Atlantic

Analysts expect that more than £10 billion will be spent over four days, which will serve as a bellwether for what retailers can expect from the Christmas period.  
However, with living standards continuing to be squeezed, rising inflation resulting from a weaker pound, and yesterday’s prediction from the Resolution Foundation that real average earnings will not return to their 2008 peak until 2025, are retailers’ hopes misplaced?


Germany’s Social Democratic Party (SPD) is ready to hold talks with Angela Merkel about the formation of a new government, a move which would break the political deadlock in Berlin. Hubertus Heil, the SPD’s general secretary, said that his party is “firmly convinced that talks have to take place”. However, it is not clear whether the SPD would be willing to revive the “grand coalition” or simply offer support for a minority government.
Theresa May is in Brussels today for a summit where she will warn her EU counterparts to be way of “hostile states like Russia” and commit the UK to a unified approach to European security after Brexit. She is expected to urge European countries to work together in order to “protect our shared values and ideals”. Although Brexit is not officially on the agenda of the summit, May will meet European Council President Donald Tusk for talks ahead of the next EU summit in December. It has been reported that the prime minister will concede ground on the Brexit divorce bill in exchange for a written guarantee that trade talks will commence in December.
An investigation by The Times has shown that adverts from some of the world’s biggest brands are appearing on YouTube videos frequently viewed by paedophiles. The comment sections of the videos, mostly uploaded by innocent children themselves, are used by paedophiles to exchange links to child abuse and make lewd comments. An IT security expert said that these types of videos are popular with paedophiles as it isn’t always illegal, and warned that the content could end up on the dark web or in abuse-related discussion groups. Many of the brands included in the report have pulled YouTube advertising campaigns in response.
Hopes that the ARA San Juan, the Argentine submarine that has been missing in the South Atlantic for nine days, may yet be found and its 44 crew members rescued have been dashed after an event “consistent with an explosion” was detected in the area. Confidence had already faded after the seven-day limit of the vessel’s oxygen reserves were reached on Wednesday morning. Friends and relatives of the crew, who have been camped out at a naval base in the city of Mar del Plata, reacted with grief at the announcement and directed their anger at navy officials, questioning the age of the submarine.

Business & Economy

Concerns over the disparity in gender pay at the Bank of England have been highlighted after it was revealed that men are paid nearly a quarter more than their female co-workers. According to the central bank’s own figures, the median pay gap was 24.2% - well above the 9.1% average for full time UK workers, but below the 35.6% of the financial services industry as a whole. Governor Mark Carney said the bank was working hard to “address the imbalance” and expressed confidence that “men and women are paid equally for equivalent jobs”, but that there is “an imbalance of male and female colleagues across the organisation”.
Unilever has commissioned headhunters Egon Zehnder International toidentify a successor to Paul Polman, its chief executive who has been in post since 2009. No date has been set for Polman’s retirement although the company expects him to step down in about 18 months. The news will spark a race for one of the top jobs in the global consumer products industry as a thorough international search is carried out, although Graeme Pitkethly, currently Unilever’s finance director, is a possible internal candidate.


What happened yesterday?
The FTSE 100 closed marginally down, losing 0.02%, at 7,417 points yesterday.
Centrica was by far the biggest faller of the day. Shares in the owner of British Gas fell by 15.49% to 138p – their lowest level in 14 years – after the company warned that adjusted full-year earnings per share are expected to come in below market consensus due to problems at its North American division and the loss of 823,000 accounts in the UK since June 2017.
In a trading statement, Chief Executive Ian Conn admitted that “some aspects of our delivery in the second half of 2017 have been disappointing” but insisted that company performance would be “broadly in line” with last year thanks to efficiency savings.
Meanwhile, housebuilders recovered some of the losses suffered after Wednesday’s budget announcement that the government would reclaim land that is not developed quickly enough.
Barratt Developments climbed 1.80% and Taylor Wimpey added 1.86%.
On the currency markets, the pound was 0.2% lower against the dollar at $1.3302, and fell 0.4% against the euro at €1.1290.

Caffyns, Fuller Smith & Turner
Coal of Africa Ltd., JP Morgan Emerging Markets Investment Trust, Origin Enterprises, Petra Diamonds Ltd. (DI)

Public Joint Stock Company Severstal GDR (Reg S)


K&C Reit
UK Economic Announcements
(09:30) Mortgage Approvals
International Economic Announcements
(09:00) IFO Business Climate (GER)
(09:00) IFO Current Assessment (GER)
(09:00) IFO Expectations (GER) 

Columns of Note

In The Telegraph, Fraser Nelson states that, following a fairly well received Budget, now is the time for the Conservatives to take the fight to Labour. He accepts that the Spring Budget, general election and Conservative Party conference were disasters that allowed Labour to gain traction. However, he contends that that Corbynite arguments crumble under proper scrutiny – as proven by John McDonnell’s post-Budget performance – and that a functioning Tory party could still carry the day.
Writing in The Times, Ed Conway points out the irony that the content of this week’s budget is very similar to what might have been delivered by an Ed Miliband government two years ago. He says that the increased spending is fine for now but that, eventually, the UK will need to confront issues, including an unaffordable pensions triple lock and a struggling NHS.

Did you know?

Black Friday is known as a hectic day for retailers. However, it is also the busiest day of the year for plumbers in the US, due to people clogging their drains and rubbish disposal with cooking fat and food waste. 

Parliamentary highlights
House of Commons
No business scheduled
House of Lords
Equality Act 2010 (Amendment) (Disabled Access) Bill [HL] - 2nd reading - Lord Blencathra
Home Education (Duty of Local Authorities) Bill [HL] - 2nd reading - Lord Soley
Creditworthiness Assessment Bill [HL] - 2nd reading - Lord Bird
Scottish Parliament
No business scheduled