29 Aug 2018

Daisy Penman

29 Aug 2018

Good morning, 

Whitney Houston believed that the children are our future - if so, perhaps we should all be trying harder for them.

It is reported today that there is a record number of children being expelled from schools and sent to Pupil Referral Units, with the number of children under the age of 10 in these units doubling in the last six years. The reasons for expulsions vary - at the extreme end, one five year old was accused of attacking a teacher with a hockey stick, another child kicked a teacher in the face as she bent over his chair. 

There has been criticism of the system of expulsion, with campaigners arguing that excluding a child from the mainstream system harms them more in the long run - only 1.5% of children in PRUs achieve “good” passes in English and maths. Moreover, since 2015 over 30,000 teenagers have not recorded GCSE results despite being on the schools’ rolls a year earlier. Many were sent to PRUs.

A report from University College London has shown that children aged 10-17 are most concerned about school and their appearance. Worries about school perhaps aren't surprising when many face the threat of expulsions and there have been reports from teachers in Scotland that the standardised tests given to P1, P4, P7 and S3 pupils cause too much stress with few benefits. 

Even more distressing is the finding that a quarter of girls aged 14 may be self-harming, with nearly one in 10 boys reportedly doing the same. Mental health campaigner Natasha Devon has pointed to increased pressure on school children for this spike, saying that the lack of emphasis on sport, art and music has stopped young people from accessing the subjects that may provide them with outlets for stress.

It’s a bleak picture, I know, but it’s a picture we need to look at. With youth turnout at elections the highest in 25 years in 2017, educating these young voters is paramount and keeping them in school may be the first step on that path.

News

Prime Minister Theresa May dismissed a leadership bid from Boris Johnson, instead stating that she intends to lead the party “for the long term”. This comes amid increased speculation around Johnson’s next moves after quitting the cabinet over May’s Chequers proposals. Speaking in South Africa during the first leg of her four-day trip to Africa, May said that at the forthcoming party conference she would focus on housing issues, education for young workers and a 10-year plan for the NHS that would boost its finances. Back in the UK, campaign group Best for Britain has claimed that the health secretary’s plans to set aside six weeks’ worth of vital medicines could cost up to £2 billion, but it is unclear whether the taxpayer would have to foot the bill.

British fisherman have called for protection from the Royal Navy after their boats were attacked by French vessels while catching scallops in the English Channel. There were a total of 35 French vessels that surrounded five British boats on Tuesday morning, with the French reportedly throwing rocks and flares which resulted in a smashed window in one of the British boats. The tensions come as there was no agreement over scallops reached in the annual meeting between French and British fishery representatives; the French blame this on Brexit, saying that the British are seeking an overall fishing agreement and not focusing on scallop fishing, which has been a point of disagreement for years.

Germany saw its worst far-right clashes in 26 years on Monday night, with 6,000 far-right protestors and 1,000 counter-protestors taking to the streets of the eastern city of Chemnitz following the death of a man at the weekend who was reportedly attacked by migrants. Police were outnumbered 10 to 1 by extremist protestors and at least 20 people have been injured. MPs from Germany’s hard right Alternative for Germany party have been criticised after throwing support behind the violent protestors, with one tweeting: “The problem isn’t the peaceful protests…it is the rapes and murders by illegal immigrants.”

Business & Economy 

British shop prices rose for the first time in five years following hot weather and the rising price of oil. Compared to last year, shop prices rose by 0.1% in August 2018 according to the British Retail Consortium, with food price inflation hitting an annual rate of 1.9%, up from 1.6% in July. The hot weather has reduced the supply of British foods and the rising price of oil means that the price of fuel for transport and agricultural equipment has soared, further contributing to the increase in prices. For non-food products, however, prices fell by one per cent in the year to August, which still represents a significant easing of deflationary momentum.

A Royal Bank of Scotland manager who is under investigation following accusations of bribery was given a payoff when he left the bank, according to The Times. The individual had been suspended from the bank’s Global Restructuring Group in 2016 prior to being given a voluntary redundancy package - the bank indicated that the suspension was for “personal reasons” and did not have anything to do with the alleged bribery. The manager is accused of demanding thousands of pounds in cash from customers in return for showing leniency towards their troubled companies, but the bank insists that the payoff was given before they knew of the bribery allegations.

City economists have voiced their support of Mark Carney extending his stay as governor of the Bank of England. Carney’s term is due to come to an end in June 2019, a year earlier than expected, but if he were to remain in the position it would provide some breathing space for his successor after Brexit. Following this speculation the Treasury played down the idea, with officials saying that they “did not recognise the reporting” which was published in the diary pages of the Evening Standard, a paper edited by former chancellor George Osborne, who was responsible for hiring Carney in 2012.

Markets 

What happened yesterday? 

The pound fell to £1.1021 against the euro yesterday, its lowest level since September 2017, after Theresa May said that a no-deal Brexit “wouldn’t be the end of the world.” However, the FTSE 100 finished up by 0.52% at 7,617.22 and the pound recovered marginally through the course of the day. 

Italian markets have continued to underperform as the country’s populist coalition leaders negotiate ahead of their first finance bill - Milan’s FTSE MIB fell by 0.9%.

American markets had a better day. Buoyed by the US-Mexico trade breakthrough, the S&P 500 extended its record closing high to hit 2,903.77 early in the session, before slowing down later on. 

Interims
Fisher (James) & Sons
The Gym Group
Permanent TSB Group Holdings
IQE
Petrofac Ltd.

Trading Announcements
Diploma

AGMs
Atlas Mara Limited (DI)
Lindsell Train Inv Trust
Montanaro European Smaller Companies Trust
Puma Vct 13
Ultimate Sports Group
Vordere

UK Economic Announcements
(00:01) BRC Shop Price Index
(07:00) Nationwide House Price Index

Int. Economic Announcements
(07:00) GFK Consumer Confidence (GER)
(12:00) MBA Mortgage Applications (US)
(13:00) GDP (Preliminary) (US)

Columns of Note 

In The TimesDaniel Finkelstein looks back on the life of Senator John McCain and what his legacy means for Western democracy. McCain was, according to Finkelstein, an idealist whose love for and pride in the strength of American values meant that he represented a branch of conservatism that is rapidly disappearing from mainstream politics.

In The GuardianDani Garavelli argues that Holyrood needs to focus on the claims against Alex Salmond and what they mean for the party, instead of getting caught up in a legal battle over whether the reports were obtained in the right manner. Garavelli says that the process issues distract from ensuring that those who have complaints feel comfortable reporting them.

Did you know? 

In its early days, Fedex was denied a vital loan and almost went bankrupt. As a last resort, its founder Fred Smith took the company’s last $5,000 to a Las Vegas blackjack table hoping to make enough to save them; he came back with $32,000.

Parliamentary highlights 

House of Commons
In recess until September 4, 2018.
 
House of Lords
In recess until September 4, 2018.
 
Scottish Parliament
In recess until September 4, 2018.