25 August

Scott Reid

25 August

Good morning,

With the end of the parliamentary recess in sight, the media silly season is almost up.
But not quite.
In one of Scotland’s longest and most drawn-out media dramas, Edinburgh Zoo’s Tian Tian, Britain’s only female giant panda, is believed to be pregnant, with the new arrival expected to make an appearance within days. A Scottish Government email exchange with zoo officials revealed the news, which is a change in fortunes for the panda, who has suffered  several pregnancy setbacks in the past.
The Scottish – and indeed the world’s – media has reacted with “pandamonium” and a liberal use of other questionable puns.
David Mundell MP, the Secretary of State for Scotland, who has strong opinions on panda jokes, remained silent on the issue yesterday.
Elsewhere, the French media have taken aim at Emmanuel Macron over evidence he spent €26,000 on makeup in his first three months as French president. The Elysee Palace defended the high fee saying they had called in the makeup contractor as “a matter of urgency”.
Of course, Macron isn’t the first French president with a taste for extravagance. His Socialist predecessor, François Hollande, was reputed to have spent €99,000 on payments to his personal barber, which the press described as ‘shampoo Socialism’.
But the real bad news for the 39-year old centrist is the fast-dwindling poll ratings since his whirlwind election, meaning the gloss has come off his presidency quicker than that of any of his predecessors.
Plus ça change for French politics it seems. You really couldn’t make it up.


Net migration from the EU has fallen to a three-year low amid warnings of a ‘Brexodus’. The number of EU citizens leaving the UK increased by a third in the year to March, as overall net migration hit 246,000 following a jump in emigration and sharp fall in immigration, according to the Office for National Statistics (ONS). The data also revealed that fewer than 5,000 international students stayed in the UK after their visa expired, despite estimates having been close to 100,000. The prime minister is thought to be increasingly isolated in cabinet over her decision to include foreign student numbers in the government’s immigration targets.
A key ally of Turkish president Recep Tayyip Erdogan has threatened war in response to a Kurdish independence referendum. Devlet Bahceli, leader of the Nationalist Movement Party, said yesterday that an area in the northern Kurdish Autonomous Region used as a base for anti-Turkish Kurdish guerrilla forces, should be “blown out of the water”. He said independence, which is likely to win massive support in next month’s referendum, would be a “cause for war”.
Islamic State has issued its first video made in Spain, threatening terrorist attacks in a bid to reconquer Andalusia for the ‘caliphate’. The recording shows a militant threatening that “Allah willing, al-Andalus will become again what it was, part of the caliphate. Spanish Christians, don’t forget the Muslim blood spilt during the Spanish inquisition.” As police investigated last week’s attacks in Catalonia, fresh questions were raised yesterday about links between terrorist cell networks across Spain.


A collapse in consumer spending is dragging Britain close to recession, economists warned yesterday. Data from the ONS showed consumption growth at its weakest since the end of 2014, rising only 0.1 per cent in the three months to June. Economists said the data proved that households are reining in spending as inflation outstrips wages. Pay has shrunk in real terms for three months running and a reprieve is not expected this year, although the ONS’s estimates for the UK’s Q2 GDP growth remain unchanged at 0.3 per cent.
Britain’s top companies could be forced to disclose the pay gap between the pay of their CEOs and workers in government plans, as Theresa May persists with her domestic reform agenda. Government sources stressed that pay transparency plans were only one aspect of a broader reform package to block boardroom excess, amid suggestions the prime minister was stepping away from more radical plans to curb pay. The issue was central to June’s General Election as Labour also aired a proposal during the campaign for a pay cap that would limit the highest paid member of staff to 20 times that of the average worker, for companies with public sector contracts.
‘Driverless’ lorries will be trialled on Britain’s motorways from next year, the UK Government has announced. Up to three lorries will travel in automated convoys, controlled only by a driver in the lead vehicle and connected via radar, GPS and wifi, in order to cut congestion and emissions on British motorways. The technology has already been successfully trialled in Europe and the US, but motoring organisation The AA has previously said that it is not suitable for the UK's congested motorways.


What happened yesterday?
London stocks held on to small gains on Thursday, even as the latest UK economic figures showed weak growth in the second quarter. Amid a slowdown in household spending and business investment, data from the ONS confirmed a 0.3 per cent rise in UK GDP year-on-year in the three months to June, meaning Britain was the slowest growing G7 economy thus far in 2017.
The FTSE 100 was up 0.33 per cent or 24.4 points at 7,407.06, helped by solid gains in blue-chips and the mining sector, performing well against its European counterparts. Struggling doorstep lender Provident Financial saw yesterday’s biggest rise at 13 per cent, regaining a further 87 points to 748. Other stand-out winners included British American Tobacco, gaining 111.5 points to 48.40 as it makes further steps in the e-cigarette market, and construction company Carillion, pushing up 4.4 points to 47. Dixons Carphone saw the biggest drops with a 23 per cent plunge owing to poor second quarter results as a backlash from the EU’s scrap of roaming fees in June.
Investors took their foot off the gas in the afternoon, awaiting key clues on monetary policy expected in speeches by US Federal Reserve chair, Janet Yellen, and the president of the ECB, Mario Draghi, at the Jackson Hole conference tomorrow.
The pound was marginally up against the euro at €1.0847 - having fallen to an eight-year low against the single currency on Wednesday - and the dollar at $1.2805.

ITM Power

Henry Boot, Computacenter

Naspers Ltd. ADR, Stagecoach Group, Sysgroup


International Economic Announcements
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(13.30) Durable Goods Orders (US)


Martin Kettle comments in The Guardian on the need for a ‘Norway-style’ deal to be quickly sought in Brexit negotiations. He says a series of poor economic figures and blunders by the British cabinet means the case for severing Britain’s ties with the single market and customs union is fast being undermined, pressing the need for cross-party support of alternative solutions.
In The Daily Telegraph, Fraser Nelson comments on the recent spate of migration figures as “a wake up call” for British industry in its approach to immigration. He argues for Brexit as an opportunity for a dialogue between government and industry on reforming the migration and labour systems, calling for significant investment in training, machinery and pay as a solution.


The shortest war in history was between Zanzibar and the United Kingdom in 1896. Zanzibar surrendered after 38 minutes.