4 January

@ScottReid1992

4 January

Good morning,

The US president ‘horrified’ at his own election victory; a British prime minister alleging spying in exchange for promotion; and accusations of ‘treason’ against members of the president’s own family.

If you thought the reality-TV White House had given us our fair share of drama in 2017, readers, wait until you get a load of 2018 - “it’s gonna’ be huge”.

The incendiary claims are made in Fire and Fury: Inside the Trump White House, an upcoming book by author Michael Wolff, which draws on more than 200 interviews with Donald Trump’s circle and the president himself to portray an administration beleaguered by inexperience and petty infighting among senior staff.

A sneak preview of the claims has been collated by The Times.

In deciding what’s worse, comments made by former chief strategist Steve Bannon that meetings between Donald Trump Jr and Russian officials during the presidential election campaign were ‘treasonous’ are likely to take the biscuit. As Robert Mueller’s investigation into collusion between the Trump campaign and Russia kicks up a notch in the new year, Bannon’s claims are likely to prove explosive.

In characteristic fashion, the president has already taken to Twitter to vent his outrage at the accusations. Trump posted that, ‘When [Bannon] was fired, he lost his mind’, issuing a cease and desist letter threatening legal action against the claims, including accusations of defamation by libel and slander and breach of written confidentiality.

Perhaps the reports should be taken with a very large pinch of salt. In an administration as fractious as this one, haven’t we seen enough to expect vendettas, backstabbing and grandiose claims at every turn?

Still, as the book made the jump from 48,449th to number 1 on Amazon’s bestseller list in a single day, I expect I won’t be the only one reaching for the popcorn come its publication next week.

News

Michael Gove is to promise that UK farmers will receive the same level of subsidies from the EU for five years after Brexit. (£) In a speech expected at the Oxford Farming Conference later today, the environment secretary will commit to paying more than £10 billion for ‘basic payments’ made per acre under the EU’s common agricultural policy (CAP) until March 2024.

An emerging détente between North and South Korea has not been negated by President Trump’s comments over the size of Kim Jong-un’s nuclear arsenal. (£) Pyongyang yesterday reinstated a hotline with South Korea for the first time in two years, whilst in the US Democrats are now seeking legislation requiring congressional approval for the launch of a nuclear strike by the president in response to the comments.

The government has defended its appointment of Toby Young to a higher education watchdog role despite mounting criticism of comments made by the journalist about women, working class people and eugenics. Boris Johnson and the Department for Education cited Young’s past advocacy of free schools as evidence of his suitability for the role. Meanwhile, around 50,000 tweets were reported to have been deleted from Young’s profile, as the journalist also penned a Spectator column in his defence. (£)

Business & Economy

Average salaries for chief executives in Britain have fallen by almost £1 million following greater pressure from politicians and investors, a new study has found. The average FTSE 100 chief executive earned £4.5 million in 2016, down from £5.4 million in 2015, according to the High Pay Centre and the Chartered Institute for Personnel and Development. This marks the lowest pay for business leaders since 2012, but is still 120 times the average full-time worker’s salary.

American GDP could have topped 4 per cent in 2017 - its best year since 2004 – according to a new survey. (£) The figure from the Institute of Supply Management’s manufacturing index would top President Trump’s predication of 3 per cent growth by 2021 made whilst campaigning for the presidency. Economists also predict that tax cut legislation passed shortly before Christmas could add as much as 1.3 percentage points to growth in 2018.

The Institute for Fiscal Studies has warned more jobs may be at risk of being replaced by automation if the living wage continues to rise. Based on an hourly rate of £8.50 per hour by 2020, the think tank suggested firms were more likely to invest in robots and computerised systems if alternatives were less expensive than labour.

Markets

What happened yesterday?
Despite getting off to a rocky start to the year, the FTSE bounced back with a 0.3% rise yesterday, closing at 7671.11 and just 16 points shy of the market’s record in 2017.

Retailers took the lion’s share of gains, with Next jumping 6.67% on the back of delivering a surprise lift in sales over the holiday period. M&S and Primark also benefitted in the sector, which analysts have attributed to greater spending on warm clothing during colder weather. Shares in BP and Shell rose 1.29% and 1.45% respectively as oil prices peaked above $67 a barrel following protests in Iran, a major oil producer.

Elsewhere, construction firms were among the day’s biggest losers following a poor performance by the sector in December. The latest index rating fell to 52.2 from the 53.0 the market had been predicting, although any rating above 50.0 identifies positive growth.

The pound was down 0.5% against the dollar at $1.35 and fell 0.3% against the euro to settle around €1.12.

AGMs
Cambria Automobiles

GMs
Xafinity

UK Economic Announcements
(07:00) Nationwide House Price Index
(09.30) Consumer Credit
(09.30) Mortgage Approvals
(09.30) PMI Services

International Economic Announcements
(08:55) PMI Composite (GER)
(08.55) PMI Services (GER)
(09.00) PMI Composite (EU)
(09.00) PMI Services (EU)
(13.30) Continuing Claims (US)
(13.30) Initial Jobless Claims (US)
(14.45) PMI Composite (US)
(14.45) PMI Services (US)
(16.00) Crude Oil Inventories (US)

Columns of Note

In the New Statesman Staggers’ column, George Eaton comments that the winter crisis currently facing the NHS was set in stone by years of chronic underfunding by the Conservatives. Eaton notes that the NHS has endured its longest period of austerity since 2010, and although a move akin to Gordon Brown’s decision to raise National Insurance by 1p in 2002 might restore faith in the health service, the prime minister is hamstrung to do anything.

Writing in the Financial Times, Edward Luce suggests that a stand-off between the world’s two largest economies might be looming as Xi Jinping’s tactics of flattering Donald Trump look to be wearing thin. (£) From North Korea to Pakistan and rising protectionism in China, Luce comments that overconfidence on part of the Community Party’s leader might be his undoing in a battle of egos with an unknown entity.

Did you know?

The Olympic flag’s colours are always five red, black, blue, green, and yellow rings on a white backdrop. This is because at least one of those colours appears on the flag of each of the world’s nations, whilst the rings represent the world’s five continents.

Parliamentary highlights

House of Commons

In recess until 8th January

House of Lords

In recess until 8th January

Scottish Parliament

In recess until 8th January