3 April 2019

Stuart Taylor

3 April 2019

Good morning,

I’m sure we’ve all had mornings like it; the 6:30am alarm goes off, followed by one at 6:45am, then 6:47am and before you know it it’s after 7am and you’ve gone full Mr Bean as you race to make it into work on time.
 
Well, such scenes will be a thing of the past if researchers at Goldsmith's University get their way after they called for the snooze function to be removed from mobile phones, arguing that fans of the button – which according to their research is 80 per cent of us here in the UK - can suffer from reduced alertness, attention and working memory. Their research yesterday follows an appeal to Apple by sleep wellness brand Eve to remove the function from the phone’s next system update for the sake of our mental health.
 
Reading this morning’s business pages, I’m struck by the fact that our phones being identified as causing grogginess and sleep inertia presents a metaphor for the current wrangling taking place in Westminster, which is causing confused UK businesses to wake up to the harsh realities of the domestic economy.
 
News that Britain’s construction sector shrunk for the second month in a row in March has caused alarm, and uncertainty over the country’s future relationship with the EU has been identified as the clear cause. It is the first time that activity in the sector has suffered a back-to-back fall in output levels since the first two months after the June 2016 referendum. 
 
Although housebuilding saw moderate growth, construction firms laid out a backdrop of increased raw material costs, delays to goods orders and reduced capacity in the supply chain. On top of a restraint on investment, the survey also highlighted a trend of stockpiling at levels never seen before.
 
To further compound the gloom, the British Chambers of Commerce have a survey of their own and it, too, indicated that the economy had effectively “ground to a halt” in the midst of Brexit uncertainty. The results from the 7,000 businesses that took part – which collectively employ a million workers – indicated that businesses were "hitting the brakes" over investment and recruitment plans as they wait for the government to offer clarity.
 
The industry body’s director general, Dr Adam Marshall, said that the findings should serve as a “clear warning that the ongoing impasse at Westminster is contributing to a sharp slowdown in the real economy.”
 
Theresa May’s government met for a marathon eight hours yesterday and one can only hope that the voice of business was loud and clear around the cabinet table, for the consequences of a stagnant economy caused by a weak housing market, declining investment and pessimistic executives is the stuff of nightmares. It would be enough to keep any prime minister up at night.

News

Theresa May and Jeremy Corbyn are expected to meet later today as the prime minister turns to the Labour leader to help break the Brexit deadlock and come up with a modified version of her deal with the EU. The move has angered Brexiteers in her party, as it all but ensures that a closer relationship with the EU - a softer Brexit – is the most likely outcome. If May and Corbyn can agree a deal, it will be put to a vote in the Commons before 10 April - when the EU will hold an emergency summit.
 
Canada’s prime minister, Justin Trudeau, has been accused of betraying justice after he expelled two corruption whistleblowers from the party. Jody Wilson-Raybould and Jane Philpott, who had already resigned from Trudeau's cabinet after accusing him of meddling in a criminal case involving an influential company, have been removed from the Liberal Party, months before a general election.
 
The Washington Post has reported that the four children of Jamal Khashoggi, the journalist killed in the Saudi consulate in Istanbul last year, have received million-dollar houses and monthly five-figure payments as compensation for the killing of their father. The paper – which employed Khashoggi as a columnist – say that the payments and luxury houses have been given in return for refraining from criticism in relation to their father's killing.
 
Brunei has sparked international condemnation after introducing strict new Islamic laws that make gay sex an offence punishable by stoning to death. The new measures, that come into force today, also cover a range of other crimes, including punishment for theft by amputation, and will make Brunei the first country in east or southeast Asia to have a sharia penal code at the national level.

Business & Economy

Extreme weather last year - both cold and hot – contributed towards UK food prices last month reaching their highest rate of inflation in almost six years. According to the British Retail Consortium, the weather hit the planting of crops, pushing up the price of foods including onions, potatoes and cabbages, while an increase in cereal prices saw a rise in the cost of bread. Food price inflation was 2.5% in March, up from 1.6% in February, the highest since November 2013.
 
Ruth Cairnie, a former oil executive at Royal Dutch Shell, has been appointed as the new chair of Babcock International, replacing the outgoing Mike Turner. Cairnie will assume the role at Britain’s second-largest defence contractor’s annual general meeting in July, becoming the company’s first female chair. (£)
 
From today, all 4,500 UK employees of Diageo will be able to take advantage of 52 weeks of parental leave, the first 26 of which will be on full pay. The spirits company said that the new policy was part of its efforts to “create a fully inclusive and diverse workforce”. (£)

Markets

What happened yesterday?

London’s blue-chip index hit a six-month high yesterday after the latest episode in the Brexit drama sent sterling sliding against the dollar and euro. The weaker pound, combined with a slight rebound for easyJet, saw the FTSE 100 index close up 73.74 points, or 1.0%, at 7,391.12, having hit its best level since early October 2018 of 7,403.56 in afternoon trade. The airline closed up 2.3% on Tuesday, following a 9.7% dive on Monday.
 
At close of trading, the pound was at $1.3030, down compared to $1.3118 at the close on Monday. However, after Theresa May’s announcement that she will ask the EU for an extension to the Brexit deadline to "break the logjam" in parliament, it rose again, up against the euro at €1.1703, and 0.47% higher against the dollar at $1.1304.
 
It was a good day for FTSE 100 banks, with Standard Chartered ending the day up 3.6%, HSBC Holdings up 1.7% and Barclays shares up 1.3%. However, the index’s best performer was fund supermarket Hargreaves Lansdown, closing 4.2% higher.
 
The FTSE 250 ended up 90.51 points, or 0.5%, at 19,329.27, and it was another airline, Wizz Air, that led the day’s risers with shares up 4.9%. It was a different story for Superdry, after the narrow decision by shareholders to re-elect co-founder and former chief executive Julian Dunkerton to the board saw shares crash by seven per cent and directors resign en masse.

Finals
AA
JTC
Minds + Machines Group Limited (DI)
Shield Therapeutics
Urban Exposure
 
Interims
Applied Graphene Materials
Gattaca
 
UK Economic Announcements
(09:30) PMI Services

Int. Economic Announcements
(08:30) PMI Composite (GER)
(08:55) PMI Services (GER)
(09:00) PMI Composite (EU)
(09:00) PMI Services (EU)
(12:00) MBA Mortgage Applications (US)
(14:45) PMI Composite (US)
(14:45) PMI Services (US)
(15:00) ISM Non-Manufacturing (US)
(15:30) Crude Oil Inventories (US)

Columns of Note

In the Financial Times, Brooke Masters says that the recent Boeing 737 crashes should serve as a warning in other areas where technology is taking over tasks from human experts, namely self-driving technology. Masters says that she worries about how many “assistive technologies” are being added to daily life without us fully understanding their effect, and that the onus is on carmakers to think about the accidents that could befall unsuspecting drivers. (£)
 
Kenny Farquharson writes in The Times that the SNP’s decision to back a soft Brexit in parliament evidences a “born-again pragmatism” in the party. Farquharson argues that the SNP had left the field of compromise recently but that their actions this week show how Nicola Sturgeon and her party colleagues at Westminster are prepared to show cool heads and compromise at a time of national crisis. (£)

Did you know?

Bic pen caps have a hole to reduce the risk of suffocation if accidentally inhaled.

Parliamentary highlights

TODAY
 
House of Commons
Oral questions
Wales
 
Prime Minister’s Question Times
 
Ten Minute Rule Motion
Animals (Recognition of Sentience) – Kerry McCarthy
 
House of Lords
Oral Questions
Ensuring the public have access to cash throughout the UK – Lord Naseby
 
Implementing the recommendations of the report of the Joint Committee on Human Rights “Immigration Detention” – Baroness Whitaker
 
Implementing the recommendations of The Alison Rose Review of Female Entrepreneurship – Lord Harrison
 
Scottish Parliament
Portfolio Questions
 
Scottish Conservative and Unionist Debate: Health

TOMORROW

House of Commons

Oral questions
Exiting the European Union (including Topical Questions)
 
Business Statement
Business Questions to the Leader of the House - Andrea Leadsom
 
Backbench Business
Debate on a Motion relating to the Introduction of the 2019 Loan Charge - Ross Thomson, Sir Edward Davey, Ruth Cadbury, Dr David Drew, Anna Turley, Caroline Lucas
 
Debate on a Motion relating to Restrictive Intervention of Children and Young People - Norman Lamb, Anne-Marie Trevelyan, Helen Hayes
 
House of Lords
Oral questions
Current assessment of religious persecution in China - The Lord Bishop of St Albans
 
Ensuring long-term viability of upland farming - Baroness Jones of Whitchurch
 
Reducing the number of households in fuel poverty - Baroness Donaghy
 
Decision by some teachers to take a 20 per cent pay cut in order to prevent staff redundancies - Lord Watson of Invergowrie
 
Debate
Report from the Economic Affairs Committee 'Making Tax Digital for VAT: Treating Small Businesses Fairly'; Report from the Economic Affairs Committee 'The Powers of HMRC: Treating Taxpayers Fairly' - Lord Forsyth of Drumlean
 
Report from the Communications Committee 'UK advertising in a digital age' - Lord Gilbert of Panteg
 
Report from the European Union Committee 'Brexit: food prices and availability' - Lord Teverson
 
Scottish Parliament
General Questions
 
First Minister’s Questions
 
Stage 1 Debate: Transport (Scotland) Bill