28 November 2018

Stuart Taylor

28 November 2018

Good morning, 

He might have had time this week to pass judgment on Theresa May’s Brexit negotiations, but Donald Trump himself doesn’t have his problems to seek when it comes to his own trade dealings, the ramifications of which continue to cast a long shadow of uncertainty across the global economy.

It had been hoped that the US and China could come together and reach agreement that would bring an end to the long-running trade war between the two countries, before their respective leaders set foot in Argentina on Friday for the G20 summit. However, the outlook does not look rosy and, if anything, further escalation is a more likely prospect.

Larry Kudlow, the White House’s top economic adviser, yesterday bemoaned China’s inability to change approach, arguing that their reluctance to concede any ground left the chances of a breakthrough “highly unlikely” unless Chinese President Xi Jinping happened to “have a lot more to say” when he sat down with Trump in Buenos Aires.

With the move to hike tariff rates on $200bn of Chinese goods from 10% to 25% going ahead as planned on New Year’s Day, and a further $267bn worth of goods in line to be included if no agreement is reached, the meeting between the two leaders is being viewed as a make-or-break moment for the world economy and financial markets, who continue to trade under conditions of uncertainty.

And it seems that taking on the second biggest economy in the world isn’t enough for the US president, as reports from Germany suggest that he is also taking aim at foreign vehicles. It is suggested that Trump will make a decision after this weekend about whether to impose a 25% tariff on cars imported from all countries, with only Canada and Mexico spared from the increase.

The timing of such action could not be less coincidental, coming 24 hours after General Motors announced that it would shut two plants in his manufacturing heartland in Michigan as part of a restructuring plan to save $6bn. The loss of 14,000 jobs will not only bring economic pain but also political discomfort for the president as the closure in Michigan, following those in Ohio and Maryland, will affect key clusters of Trump voters who usually vote on jobs.

As he prepares to pull carmaking subsidies from GM, I very much doubt that facing off against the iconic US brand was ever intended to be part of the president’s America First agenda.


The Treasury is expected to publish its economic analysis on the long-term effects of Brexit on the UK, with the Daily Telegraph reporting that it will predict £150bn in lost output over the next 15 years in the event of no deal, with Theresa May’s plan costing £40bn. The prime minister visits Scotland today as she continues to tour the country in an attempt to sell her deal.

Cleaning up after Trump’s unhelpful comments about the Brexit deal, Woody Johnson, the US ambassador to the UK, has said that if Britain can take back control over its trade policy, they will be at the front of the queue for striking the “most sophisticated and ambitious free trade deal ever done” with the US. (£)

More than 500 Australians have sought emergency assistance in Sydney after the city had its average monthly rainfall in the space of two hours. The storms caused floods, power cuts and flight delays.

Business & Economy

The UK government is to tighten regulation around limited partnerships as it looks to crackdown on a corporate structure blamed for facilitating “money laundering on an industrial scale”. The new legislation will force limited partnerships to maintain a link to the UK and be registered via an official supervised agent. (£)

The guarantor lender Amigo has announced its first dividend since becoming a public company in 2006 after reporting a 40% rise in profits for the first half of its financial year. Revenues for the six months to the end of September was up at £130m and customer numbers exceeded 200,000 for the first time. (£)

Uber’s attempt to buy Deliveroo has stalled after it was revealed the two sides are “miles apart” when it comes to valuation. Uber’s bid valued the company at less than $2bn, while it is believed that Deliveroo is currently attempting to raise $400m at a valuation of $4bn. (£)


What happened yesterday?

President Trump’s comments that Theresa May’s Brexit negotiation was “a good deal for the EU” contributed towards a 0.76% fall in the pound yesterday to below $1.28. Analysts agreed that the president’s remarks are likely to have given further ammunition to Brexiteers to vote against the deal in parliament in a fortnight, raising expectations among investors that more political and economic uncertainty lies ahead.

The FTSE 100 was also down, a trend that was seen in indices across the continent. London’s blue-chip index was down 19.15 points, or 0.3% lower, at 7,016.85. France’s CAC dropped 0.2%, while Germany’s stock market was down 0.4%.

The FTSE 250 was no different and ended in the red after a fall of 58 points to 18,660. It was a torrid day for Thomas Cook as they saw shares plunge by 22% to less than 40p. It came after the holiday company issued a fresh profit warning, saying they would be £30m lower than expected.

Brewin Dolphin Holdings
On The Beach Group
Ten Lifestyle Group

LondonMetric Property
RPC Group
Telford Homes

UK Economic Announcements
(00:01) BRC Shop Price Index

Arc Minerals Limited NPV (DI)
BATM Advanced Communications Ltd.
Croma Security Solutions Group
Harvest Minerals Limited (DI)
JPMorgan Smaller Companies Inv Trust
PRS Reit (The)
Thor Mining
Target Healthcare Reit Ltd
 Int. Economic Announcements
(09:00) M3 Money Supply (EU)
(12:00) GFK Consumer Confidence (GER)
(12:00) MBA Mortgage Applications (US)
(13:30) GDP (Preliminary) (US)
(14:00) New Homes Sales (US)
(15:30) Crude Oil Inventories (US)

Columns of Note

With the country set to gain the levers over who can move in and out of a post-Brexit Britain, Sarah O’Conner writes in the Financial Times that now is the time for a nuanced debate around what we value in the economy and what we have to do to secure it. She refers specifically to the value of low-paid workers, saying that the country is in danger of pressing ahead with the misguided belief that they are of little value and instead we only have a requirement for highly skilled jobs. (£)

Matthew Syed of The Times gives his take on The Match, the winner-takes all, $9 million golf clash between Tiger Woods and Phil Mickelson last Friday in Las Vegas. He says that sport is in danger of losing the distinctive qualities that make it so popular if it continues to chase the short-term hit of publicity and mass entertainment appeal. He concludes that while sport must continue to innovate, those in charge must always be mindful that the reasons we love watching and playing cannot be constructed or optimised in the same way as a product you would buy. (£)

Did you know?

Witzelsucht is a condition that can cause people to make jokes, puns and engage in what could be considered inappropriate conversation or behaviour. It is sometimes referred to as the Joker Disease.

Parliamentary highlights


House of Commons
Oral questions

Prime Minister's Question Time

Ten Minute Rule Motion
Fire Safety (Leasehold Properties) - Marsha De Cordova

Offensive Weapons Bill - remaining stages

House of Lords
Oral questions

Orders and regulations

Scottish Parliament
Portfolio Questions
Culture, Tourism and External Affairs
Government Business and Constitutional Relations

Scottish Conservative and Unionist Party Debate
New Approach Needed to Tackle Scotland’s Drugs Crisis

Members’ Business
Planned Bank of Scotland Branch Closures - Sandra White


House of Commons
Oral questions
Environment, Food and Rural Affairs (including Topical Questions)

Church Commissioners, the House of Commons Commission, the Public Accounts Commission and the Speaker's Committee on the Electoral Commission

Business Statement
Business Questions to the Leader of the House - Andrea Leadsom

General debate
Improving Education Standards - Mrs Theresa May

HIV and World Aids Day - Lloyd Russell-Moyle

House of Lords
Oral questions
Impact on public health outcomes of people being turned away from sexual health services, as reported by the British Association for Sexual Health and HIV - Lord Cashman

Supporting the global fight against tuberculosis, in the light of tuberculosis being the leading cause of death globally among people living with HIV/AIDS - Lord Collins of Highbury

Whether the Government's 25 year environment plan will be underpinned by legally binding targets - Baroness Jones of Whitchurch

Improving early diagnosis and survival rates for cancer - Lord Hunt of Kings Heath

Scottish Parliament
General Questions

First Minister's Questions

Scottish Government Debate: Ending Homelessness Together