5 January


5 January

Good morning,

The saga over North Korea's international diplomacy has continued into the New Year, as Kim Jong-Un's address to his people on New Year's Day prompted a war of words with the US president over who had a bigger nuclear button. However, despite this, it appears the rogue regime may be moving towards dialogue with its South Korean neighbours.

Yesterday, North Korea agreed to hold high level talks with the South for the first time in over two years, representing a change in approach for Kim Jong-Un. To date, his leadership has been characterised by a hardline approach to South Korea as he develops and tests his nuclear arsenal.

The North has agreed to talks regarding its potential participation in next month's Winter Olympics, due to be held in Pyeongchang in South Korea. The South will hope that these talks will pave the way for a more open and continuous dialogue with its neighbour.

However, the motivation of the North to open up talks at this stage is less obvious. Large scale sporting events have a great political benefit to the North Korean state. Often shunned on the international political stage, and treated as a pariah in organisations such as the UN, events like the football World Cup and the Winter Olympics allow the North Koreans to participate and appear accepted on the world stage.

For a country that spends a large amount of time defending its right to act as a sovereign nation, through developing nuclear weapons and existing free from external sanctions, participating in world events as a country on an equal footing with the rest of the world is of clear benefit.

North Korea's participation would be all the more interesting were it to happen, considering only last month the International Olympic Committee banned Russia from participating in the Games, following allegations of wide-spread state sponsored doping.


Applications for teacher training have fallen by over a third in the last year, prompting fresh concerns over a recruitment crisis in teaching. The government has failed to hit its teacher recruitment targets for the last five years, despite spending millions encouraging more people into teaching. The latest fall, from 19,330 to 12,820, represents a 33% drop.

Tony Blair has used an interview with a German newspaper to warn the rest of Europe that there could be more populist uprisings and countries leaving the Union if efforts are not made to tackle and improve Muslim migration and integration. This comes as Blair's latest intervention in the UK has warned of the limitations of Theresa May's approach to Brexit.

Donald Trump has denounced the headline making book Fire and Fury: Inside the Trump White House by Michael Wolff as "full of lies". The publisher of the book has brought forward its release from Tuesday to today, and it is now on sale. The president claims he gave no access to Wolff for the book, and argues the allegations are "misrepresentations" and that the book uses "sources that don't exist".

Business & Economy

For the first time in six years, new car sales in the UK fell, due to a plunge in demand for diesel cars. Diesel sales fell by almost 17% as consumers opt for cleaner alternatives. According to the Society of Motor Manufacturers and Traders, 2.5 million cars were registered last year, a fall of 5.6% on 2016.

Technology start ups in the UK attracted £3 billion in investment last year, almost double the figure for 2016 and more than counterparts in any other European country. Data from Pitchbook shows that UK start ups raised four times more investment than rivals in Germany and France.

MPs on the Environmental Audit Committee are calling for a 'Latte Levy' of 25p on disposable cups, followed by a total ban by 2023 if recycling does not improve. The government has agreed to seek guidance on a tax on single use products, and agrees that plastic waste is a problem that needs urgent attention.


What happened yesterday?
The FTSE100 closed at another record high yesterday. The rise was once again attributed to the weaker pound, as companies with earnings overseas have benefited as sterling slides.

The rise yesterday was fuelled by a jump in oil prices, which reached a two year high today. This rise pushed up commodity companies and created a rally in the US stock markets. The FTSE closed at 7,695.88 points.

At the other end of the spectrum, Debenhams fell 14.73% following a profit warning. The retailer announced that sales over the festive period had fallen by 2.6% and that it expected underlying profits to be between £55m and £65m this year. This is a sharp fall on analysts predictions of £83m.

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UK Economic Announcements

(00:01) BRC Shop Price Index

International Economic Announcements
(07:00) Retail Sales (GER)
(10:00) Producer Price Index (EU)
(13:30) Balance of Trade (US)
(13:30) Non-Farm Payrolls (US)
(13:30) Unemployment Rate (US)
(15:00) Factory Orders (US)
(15:00) ISM Non-Manufacturing (US)

Columns of Note

David Pilling, writing in the Financial Times, makes the case for ditching GDP as a way of measuring the wealth of nations. He argues that GDP numbers can be misleading as to the health of a country's economy, and that this is leading to problems for poor states who are judged on, and therefore driven to improve, GDP numbers.

Timothy Garton Ash, writing in the Guardian, argues that it may well be possible to stop Brexit and remain in the EU, but that the UK would need considerable help and effort from its European counterparts in order to do so. He believes that, if as we are told, so many Europeans wish for the UK to remain in the EU, they need to find their voices fast.

Did you know?

The first Winter Olympic Games was held in Chamonix, France in January 1924. 258 athletes from 16 nations participated.

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