29 August 2019

Scott Reid

29 August 2019

Good morning,

While pro-Remain MPs crashed off their lilos all over Europe, spare a thought too for the Queen, whose holiday at Balmoral must take the biscuit for being the worst of all as a result of the prorogation of parliament.
 
Is that the whine of tiny violins, I hear you cry? Hear me out. Having sent packing a beaming Jacob Rees-Mogg, prorogation bill in hand, she could be faced with the prospect of serving up the tea and shortbread for Jeremy Corbyn, Jo Swinson and Anna Soubry, all of whom have requested audiences to express their “concerns” at the latest constitutional crisis.
 
Elsewhere in the realm, political anarchy reigns. North of the border, Scottish Conservative leader Ruth Davidson is understood to be preparing to announce her resignation later today, and anti-no deal campaigners are preparing for their legal case to be put to the Court of Session. In Whitehall, the rebel alliance led by Philip Hammond is said to be plotting “radical” plans that could yet prevent a no-deal Brexit on 31 Octobera.
 
But at this stage of the game, just how “radical” can those plans be? As a lucid survey by Buzzfeed pointed out, plotting hasn’t been the rebels’ strong suit. While No 10 has spent the summer “wargaming” how to respond to potential parliamentary manoeuvres, opposition parties have been bickering over the merits of a very unlikely Ken Clarke premiership.
 
The chances of a no-confidence vote lodged against Boris Johnson’s government when parliament returns on 3 September - even if only it’s now only until the 9th - may have increased in the last 24 hours. The difficulty comes when you try to tot up the rebels’ numbers. Sure, there are plenty Tories who might be making angry noises at the prospect of no-deal. But does that mean they could stomach voting against their own government, and so usher in the prospect of Corbyn in Downing Street?

If past efforts are anything to go by, this commentator remains unconvinced. But if I were Her Majesty, I’d stock-up on the shortbread and cancel that next week away pronto. The palace might be busy this autumn.

News

Italy’s Democratic Party and Five Start Movement have agreed to form a coalition government. The joint administration, which will retain former legal academic Guiseppe Conte as prime minister, will serve until the next scheduled elections in 2023.

US Senator Kirsten Gillibrand has quit the race for the 2020 Democratic presidential nomination. Having failed to qualify for the third Democratic debate next month, Gillibrand tweeted that she intended to compete again for her New York senate seat. Gillibrand’s campaign had focused on support for the #MeToo campaign.

Greta Thunberg has arrived in New York City ahead of the start of a UN sustainability summit in September. The environmental activist landed in the US after making the 3,000 mile voyage from Plymouth 15 days ago. Thunberg will also travel to Chile where the COP25 climate conference will be held in December.

Business & Economy

The latest outlook for car manufacturing in Britain has revealed an 18.9% drop in the number of cars made during the last year. According to the Society of Motor Manufacturers and Traders, this amounts to 774,760 cars made in Britain so far this year, with a 20.2% decline in export orders since January being held “primarily responsible”. If trends continue, the society predicts that the 1.37 million cars produced in 2019 will mark the lowest year of production since 1972, when 1.92 million cars were produced.

The Financial Conduct Authority has warned that British banks may need a “generation” to fix the cultural issues that led to the payment protection insurance (PPI) mis-selling scandal. Speaking to the FT ahead of the close of a major PPI compensation drive at midnight tonight, director Jonathan Davidson suggested that progress could be reversed if a future recession placed pressure on household income. Regulatory costs imposed on the banks have so far totalled £48.5 billion. (£)

China’s state television network is set to launch its European production operation in London next month. Despite immigration delays since setting up offices in January 2018, China Global Television Network (CGTN) intends to start broadcast news “from a Chinese perspective” in September. CGTN is currently being investigated by Ofcom for allegations that it aired confessions for a business crime made under duress. (£)

Markets

What happened yesterday?

The pound took a drubbing on international currency markets yesterday following the Queen’s approval to prorogue parliament. Although the FTSE 100 was up by 0.35% at 7,114.71 points at close of play, sterling was trading down by 0.35% on the euro at €1.10, and by 0.44% on the dollar at $1.22.
 
In equity markets, the lower pound only helped what was already a cheery day for investors. Supermarkets were the standout gainers as Tesco (+2.39%), Morrisons (+1.10%) and Sainsburys (+0.51%) all finished higher after Investec upgraded its rating on Morrisons to ‘buy’ from ‘hold’. They were joined at the top by oil giant BP (+2.19%) who announced the sale of its entire Alaska business to sector peer Hilcorp Energy for $5.6 billion.
 
A lower pound and domestic economic fears hurt housebuilders Persimmon (--2.85%), Berkeley Group (-4.84%), and Barratt Developments (-3.43%), however. On the FTSE 250, oil industry engineer Petrofac also ended in the red after announcing a fall in interim core earnings and warning against lower expected revenues in 2020.

What's happening today?

Finals
Hays
 
Interims
Chesnara
Churchill China
James Fisher and Sons
Hunting
Pjsc Rosseti S
Gym Grp
 
Q1 Results
Amigo
 
AGMs
Braveheart Inv
Dods Group
Downing One

Intl. Economic Announcements
(07:00) Import Price Index (GER)
(08:55) Unemployment Rate (GER)
(10:00) Industrial Confidence (EU)
(10:00) Services Confidence (EU)
(10:00) Economic Sentiment Indicator (EU)
(10:00) Consumer Confidence (EU)
(10:00) Business Climate Indicator (EU)
(13:30) Initial Jobless Claims (US)
(13:30) Personal Consumption Expenditures (US)
(13:30) Continuing Claims (US)
(13:30) GDP (Preliminary) (US)
(15:00) Pending Homes Sales (US)

Columns of Note

In The Times business pages, Simon French makes the controversial claim that the greatest risk of a no-deal Brexit is if the economic warnings turn out to be wrong. Although he sympathises with poisoned chalice handed to forecasters, French suggests that public trust in experts will reach an all-time low if their predictions go unfounded. He asks: how could official estimates, whether private or public, be trusted ever again?
 
Today’s FT Big Read looks at the increasing divide between the former territories of East and West Germany. Although the contributing factors of economic divergence and historic grievance look set to be aggravated in the near future, Tobias Buck writes that the West has begun to see the East’s problems as those of “all” Germany’s, and so solvable in the long run.

Did you know?

This current session of parliament has not surpassed the longest session by days. The Long Parliament, which began on the 3 November 1640, and continued, without prorogation, until the 20 April 1653, sat for 3,322 days in total. That parliament arranged the trial and execution of Charles I during the English Civil War, and was only ended when OIiver Cromwell called in his soldiers to forcibly remove MPs.

Parliamentary highlights

House of Commons
In recess until 3rd September.
 
House of Lords
In recess until 3rd September.
 
Scottish Parliament
In recess until 2nd September.