Gott in Himmel. Schadenfreude. Don’t mention the VAR. You can guess where I’m going with this.
Yes, the headlines for Germany’s shock exit from the football World Cup in a 2-0 loss to South Korea yesterday could have written themselves. And so they promptly did, covering the front pages of The Times to the Daily Mail and everything in between.
But as the rest of the world mourned (or more likely celebrated) the incumbent world champions’ crash out of the competition, there were two skirmishes brewing back in the realm of politics which I think merit a closer look.
The first is in Germany where the beleaguered Chancellor Merkel has been thrown a lifeline by the offer to strike a deal with Greece which would make it easier for her government to send asylum seekers back to other European countries.
The importance of the deal to real politik in Germany is one thing. Merkel is under intense pressure to tack right from her Bavarian coalition partners who have threatened to break-up their governing agreement which has largely endured since 1949 should they fail to see a harder line from the chancellor.
But my sense is that it could mark a step-change in how a continent-wide solution to the migrant crisis may be found. Merkel is a lone figure to articulate a strategy which stresses reciprocity, migrants’ contribution to society and Europe’s unique position to accommodate the world’s needy. She offers a refreshing opinion in a landscape otherwise swamped by populism and that is surely no bad thing.
The second skirmish is closer to home where the Tory backbench 1922 Committee has ordered cabinet ministers to stop their public infighting and shore up support for Theresa May.
The clock is ticking closer to Brexit, and the threat of a leadership contest is the last thing Britain’s negotiating team needs. As one commentator pointed out on Twitter last night, discounting summer holidays, there are now only six weeks left of negotiating time before the EU’s final deadline October summit and the government still lacks an agreed strategy.
Sure, England may now fancy their chances in the football. But if the government continues the carry-on, Germany might not be the only ones destined for a crash landing.
Brussels is reported to be stepping up its contingency planning to cope with the first days of a hard Brexit, including plans to mitigate damage should the UK fail to reach a deal ahead of March 2019. Dubbed “the parachute” by officials in Brussels, the provisions are said to cover special arrangements for transport, financial services and customs, and are intended to raise private sector awareness of the legal consequences involved in trading across the Channel post-Brexit. (£)
The Times reports on fear among British ministers that President Trump will undermine Nato by striking an informal “peace deal” with President Putin when the pair meet next month. Cabinet members have suggested moves by Trump to replicate in Russia a “peace agreement” that was reached with Kim-Jong Un last month would mark a propaganda victory for Putin, and would likely involve the downgrade of US military commitments as part of Nato in Europe and across key territories in the Baltic. (£)
About 100 soldiers and an RAF Chinook helicopter have been deployed to tackle an ongoing fire near Saddleworth Moor, the Ministry of Defence has confirmed. The blaze, which covers 3.7 miles of moorland above Stalybridge, Greater Manchester, has entered its fourth day and has forced about 150 people from their homes in the nearby village of Carrbrook.
Business & Economy
Chineserail companies are among the frontrunners to operate the trains for the HS2 rail network, The Timesreports. According to a senior rail source, a joint bid by Guangshen Railway Co, a division of the Chinese state rail company, and MTR, which runs Hong Kong’s trains, is likely to beat rival bids by Virgin and First Group for the West Coast Partnership, which includes HS2. The source suggests the UK companies would be unable to cope with the financial risk involved in the tender, adding the Chinese companies have “deep, state-backed pockets and would have a blank cheque.” (£)
The total amount of merger & acquisition deals agreed in 2018 has reached $2.5 trillion, breaking the all-time high record for the first six months in the year. The FT reports that a surge in activity in the US media and telecoms sector has helped to increase global volumes by 65% on last year, representing the biggest nominal rise since Thomson Reuters began keeping M&A records in 1980. (£)
US regulators have cleared Walt Disney Co.’s plan to buy the majority of 21stCentury Fox, removing a final barrier to the proposed $71.3 billion deal. The US Justice Department’s antitrust division has required the sale of Fox’s 22 regional sports networks, warning that retaining them could lead to higher prices for cable sports watchers in local markets, where Fox and Disney currently compete. Fox has more than 60 million subscribers in this market, whilst Disney already owns the ESPN channel.
What happened yesterday?
The mood on the London markets was buoyant yesterday following the day’s main news that the Trump administration had decided to use solely existing legislation to curb Chinese investments in the country, rather than seeking alternative methods as his critics had feared. By close of trading, the FTSE 100 was up by a healthy 83.77 points or 1.11% at 7,621.69, whilst gains on the FTSE 250 were more restrained, adding 0.42%.
In corporate news, energy shares were among the day’s high-fliers, reflecting a recent surge in the price of brent crude, which topped $78 a barrel on Wednesday. Royal Dutch Shell ‘A’ (up 2.58%) and ‘B’ (up 2.81%) stocks both gained, as did BHP Billiton whose stocks ended the day 2.75% higher. Elsewhere, service retailer Whitbread was also up by 3.44% after leaving its full-year guidance unchanged, despite reporting a weak first quarter. It added that plans to spin off its Costa Coffee brand remained on track, lifting investor confidence.
The day’s main faller, however, was Just Eat (down 7.11%) following management comments that although investment at the takeaway ordering service in coming years would remain elevated, margins were likely to flatline at its marketplace business.
However, in a further boost to the FTSE, the pound dipped by 0.15% against the euro at €1.13 and was 0.65% lower on the dollar at $1.31. Here, the main spook to investors was a warning from the Bank of England about significant risks of disruption to financial services after Brexit if a current stalemate in negotiations continued, calling on the EU to do more to ensure a smooth transition.
Funding Circle SME Income Fund
Gordon Dadds Group
Live Company Group
XPS Pensions Group
Harvey Nash Group
UK Economic Announcements
(07.00) Nationwide House Price Index
Int. Economic Announcements
(00:00) Economic Sentiment Indicator (EU)
(07:00) GFK Consumer Confidence (GER)
(07:00) Import Price Index (GER)
(10:00) Business Climate Indicator (EU)
(10:00) Consumer Confidence (EU)
(10:00) Industrial Confidence (EU)
(10:00) Services Confidence (EU)
(13:30) Continuing Claims (US)
(13:30) Gross Domestic Product (US)
(13:30) Initial Jobless Claims (US)
(13:30) Personal Consumption Expenditures (US)
Energean Oil & Gas
Federal Grid Company Of Unified Energy System, Public Joint-Stock Company GDR (Reg S)
Harvey Nash Group
IDE Group Holdings
JD Sports Fashion
Pebble Beach Systems Group
Scottish Mortgage Inv Trust
Third Point Offshore Investors Ltd. GBP Shares
Victoria Oil & Gas
Columns of Note
Philip Stevens writes in the FT with a suggestion of the Conservative case for a second Brexit referendum.Whilst caveating that another referendum cannot be a rerun, Stevens suggests a new vote would allow the government to assume its natural mantle as protectors of order, the economy and respecting the will of the people, should they have changed their mind. (£)
Alistair Osborne comments in The Times on an uninspiring performance by UK government cabinet members in attendance at Tuesday’s Times’ CEO Summit. Osborne identifies a particularly frosty reception for both Boris Johnson and Jeremy Hunt’s comments that it is “inappropriate” for business to issue warnings in light of the UK government’s Brexit negotiating strategy. Osborne suggests the PM needs to start audibly communicating her government’s plans for a no-deal Brexit as a way to assuage fears. (£)
Did you know?
In 1898, England’s first escalator, or ‘moving staircase’, was installed at London’s Harrods store. Traumatised customers were offered free cognac at the top to revive them from their ‘ordeal’.
House of Commons
International Trade (including Topical Questions)
Women and Equalities (including Topical Questions)
Business Questions to the Leader of the House - Andrea Leadsom
Select Committee Statement
Ninth Report of the Health and Social Care Committee and the Seventh Report of the Housing, Communities and Local Government Committee, Long-term funding of adult social care, HC 768
Improving Air Quality - Mary Creagh, Lilian Greenwood, Neil Parish, Andrew Selous, Mr Ben Bradshaw, Dr Sarah Wollaston
The Role and Effectiveness of the Advisory Committee on Business Appointments - Sir Bernard Jenkin, Mr David Jones, Ronnie Cowan, Dr Sarah Wollaston, Paul Flynn
Support for armed forces veterans - Peter Heaton-Jones
House of Lords
Economic Statistics Centre of Excellence's conclusion that some of the UK’s largest and most internationally competitive companies account for the biggest reduction in UK productivity growth - Lord Haskel
Impact of the Boarding School Partnership information service and how many children who would otherwise have been taken into local authority care have been given places in state boarding schools as a result - Lord Farmer
Recommendations of the Select Committee on the Inquires Act 2005, in the light of the report by the National Audit Office Investigation into government-funded inquiries
- Lord Shutt of Greetland
Role and responsibilities of Police and Crime Commissioners - Lord Armstrong of Ilminster
Challenges facing disabled people in the UK in 2018 - Baroness Thomas of Winchester
Continuing violence between communities and armed groups in Nigeria - Lord Alton of Liverpool
First Minister’s Questions
House of Commons
No business scheduled.
House of Lords
Registration of Marriage Bill [HL] - Committee stage - The Lord Bishop of St Albans
Assaults on Emergency Workers (Offences) Bill - Second reading - Baroness Donaghy
Parental Bereavement (Leave and Pay) Bill - Second reading - Lord Knight of Weymouth
No business scheduled.