25 July


25 July

Good morning,

Liam Fox, the UK secretary of state for international trade, is in Washington DC where he’s meeting his counterpart Robert Lighthizer and other senior US officials for two days of talks at the first UK-US trade and investment working group.
Despite Fox’s best efforts to focus media attention on a "new and exciting chapter" in UK-US trade relations, the first day of his visit has been overshadowed by a chlorine-washed chicken controversy.
Amid worries that any free trade deal with the US would encompass agricultural exports, thereby forcing cheap chlorine-washed chicken, hormone-fed beef and genetically modified crops on to the menu, the trade secretary dismissed the chicken issue as “a detail in the very end stage of one sector of a potential free-trade agreement”.
Not that this silenced his critics at home. Campaigners have expressed concerns about welfare standards and the further creep of GM into the food chain, while Open Britain, a pro-EU group, said: “If Dr Fox think it’s safe, he should put his money where his mouth is … and devour a chlorine-washed chicken live on camera.”

The cross-party House of Lords EU Energy and Environment Sub-Committee has called for all EU animal welfare laws to be transposed into domestic law, putting further pressure on No. 10 to answer questions about whether it would lift the ban on chlorine-washed chicken or guarantee there would be no reduction in food standards after Brexit.
The US remains the UK’s biggest trading partner outside of the EU and agriculture was always likely to be a sticking point in these discussions, but as Liam Fox goes into day two of his visit with an address to Capitol Hill on British trade and investment he must be hoping that the media’s traditional summer ‘silly season’ doesn’t continue to give his discussions such a roasting.


The parents of terminally ill baby Charlie Gard have ended their legal challengeto take him to the US for experimental treatment. In an emotional statement outside High Court yesterday, Chris Gard and Connie Yates said their son could have been a "normal, healthy boy" if their attempts to access experimental therapy for Charlie had not been blocked by the courts. Mr Justice Francis paid tribute to Charlie's parents and said no-one could comprehend their agony and that no parents could have done more.
The sale of new-build homes as leasehold instead of freehold could be banned under new proposals designed to end the exploitation of would-be buyers. Sajid Javid, the communities secretary, will also propose new measures today that could dramatically cut ground rents thereby reducing their investment value to speculative buyers. A recent government report found that 4m private homes in England, or one in five, are leasehold. The proposals, which are subject to an eight-week consultation, apply only to England.
Polish President Andrzej Duda has surprised observers by vetoing two bills that would have given his populist government sweeping powers over the country's courts. The controversial bills are part of a package of judicial reforms put forward by the ruling right-wing Law and Justice Party (PiS) and passed by both houses of Polish parliament last week. The proposed reforms have prompted huge protests in the capital Warsaw and across the country. The legislation was described by protesters as the beginning of the end of democracy in the Eastern European country, one of the first former communist nations to join the European Union. Key to the legislation was the proposal to force current Supreme Court judges into early retirement, triggering the appointment of new judges by the Justice Ministry.


UK banks offering easy credit risk are endangering “everyone else in the economy”, according to a high-ranking official at the Bank of England. Alex Brazier, a member of the bank’s Financial Policy Committee, has warned banks, credit card companies and car loan providers that they risk fresh action against reckless lending. In a speech to the University of Liverpool's Institute for Risk and Uncertainty, Brazier said that High Street banks were at risk of entering "a spiral of complacency" about mounting consumer debt levels. Outstanding car loans, credit card balance transfers and personal loans have increased by 10% over the past year. In contrast household incomes have risen by just 1.5%, he said.

Alphabet’s profits fell by more than a quarter after it was hit by the European Commission fine, although the Google parent’s earnings still narrowly beat Wall Street’s forecasts. Alphabet said second quarter revenues were just over $26bn (£19bn), up 21% compared to the same period in 2016. The EU fined Google a record-breaking $2.7 billion in June after regulators accused the company of promoting its own shopping services in search results over its competitors. The amount was the regulator's largest penalty to date against a company accused of distorting the market. Alphabet has already said it may challenge the fine.
More than 2,500 products have shrunk in size over the past five years yet are being sold for the same price, according to the Office for National Statistics (ONS). Toilet rolls, coffee and fruit juice are among the 2,529 goods that are getting smaller. The ONS dismissed Brexit as a reason for recent “shrinkflation”, even though it has contributed to an increase in the price of some imported goods.


What happened yesterday

The FTSE 100 slipped one per cent to finish 75.18 points down to 7377.73, its third worst session in 2017.
London's blue chip index was dragged down by a stronger pound and a drop in Reckitt Benckiser shares, after the company revealed a fall in sales following a major cyber attack last month. Reckitt Benckiser shares were down 3.27%.
Shares in airlines also fell after comments from Ryanair raised fears of a price war in the sector. Ryanair said it could cut fares by as much as nine per cent on some routes in the next few months as competition intensified. Its comments overshadowed news of a 55% rise in first-quarter profits, and Ryanair's shares fell 1.38%. Shares across the sector were hit, with EasyJet and British Airways owner IAG down 2.82% and 0.76% respectively.
Burberry shares were among the best performers on the FTSE 100 and settled up 1.3% at £16.62, after jumping almost two per cent yesterday afternoon following Belgian billionaire Albert Frère decision to boost his stake in the luxury retailer from three per cent to four per cent.
On the FTSE 250, shares in discount retailer B&M rose 4.87% following reports at the weekend that it could be a takeover target for Asda.
The pound was trading higher by 0.2% against the US dollar at 1.302, and was up 0.5% at 1.119 versus the euro. That was despite the International Monetary Fund's (IMF) downgrade to the UK's growth forecast from 2% to 1.7% for 2017.

Acal plc (ACL), Big Sofa Technologies Group plc (BST), EPE Special Opportunities Plc (ESO), GB Group plc (GBG), Intermediate Capital Group plc (ICP), Mediclinic International plc (MDC), Mineral & Financial Investments Ltd (MAFL), MobilityOne Ltd (MBO), Mytrah Energy Ltd (MYT), TR Property Investment Trust plc (TRY), Volex Plc (VLX)

Trading Announcements
Acal plc (ACL), Gem Diamonds Ltd (GEMD), Intermediate Capital Group plc (ICP), Mortgage Advice Bureau (Holdings) Ltd (MAB1), Victrex (VCT)

Final Results
Games Workshop Group (GAW), PZ Cussons Plc (PZC)

Interim Results
Croda International plc (CRDA), Domino's Pizza Group plc (DOM), Fevertree Drinks plc (FEVR), Gresham Technologies plc (GHT), Informa plc (INF), Proteome Sciences plc (PRM), Provident Financial plc (PFG), Rathbone Brothers plc (RAT), Science Group Plc (SAG), Segro Plc (SGRO), Spectris plc (SXS), Tyman Plc (TYMN), Virgin Money Holdings (UK) plc (VM.)

Int. Economic Announcements 
(9:00) IFO Business Climate (GER)
(9:00) IFO Current Assessment (GER)
(9:00) IFO Expectations (GER)
(14:00) House Price Index (US)


Writing in The Guardian, Polly Toynbee says the Labour Party should grab the opportunity to “exploit the Tories' disarray on Europe, not copy it”. The author expressed anger that Tory politicians seem to be surprised by the fact that the American farming industry insists on any free trade deal including agriculture and lower food standards. Toynbee also criticised Jeremy Corbyn and Barry Gardiner, shadow international trade secretary, for ruling out staying in the single market and the customs union.
In The Times, Rachel Sylvester reminds readers that “the Tory party’s collective angst over Europe has already destroyed three Conservative prime ministers — Margaret Thatcher, John Major and David Cameron and it is now annihilating another”. Quoting an anonymous party source, Sylvester says it is possible the party could split over the terms of the Brexit deal.


In some countries, including Jamaica, Barbados and Saudi Arabia, it is illegal to wear camouflage clothing.


House of Commons
In recess until 5 September.

House of Lords
In recess until 5 September.

Scottish Parliament
In recess until 5 September.