6 March 2019

Stuart Taylor

6 March 2019

Good morning,

Some weeks ago I took on the unenviable task of tidying my grandparents’ loft. Armed with a head torch and a handful of bin bags, I scaled the loft ladder. What I was met with was a time capsule from the 1960s and 70s: old radios that looked like they belonged as exhibits on Tomorrow’s World, enough vinyls to open a record shop, and borrowed library books that today would carry an outstanding fine to rival the GDP of a small country.
But I also came across some real gems that delivered an incredibly vivid lens into the past. Once such item was a series of Financial Times newspapers that studied the status of several economies across the world.
Northern Ireland was one of those economies featured. The piece looked at the factors - chiefly civil unrest caused by the troubles - that were hampering industrial activity, employment rates and productivity. However, what added to my fascination was that the paper was dated 22 January 1973, a matter of weeks after prime minister Ted Heath took the UK into the European Economic Community.
I read with interest as it set out the reasons why the inevitable closer cooperation that would ensue between Northern Ireland and the Republic was of mutual benefit, indeed going as far as to determine that the economic and social interests were so close they “may at times be different from those of Britain itself”. To stress the point, the article said that on strictly economic terms, Ireland as a whole was divided not by north and south, but by the differing affluence between east and west.
Fast forward more than 45 years and this morning’s edition of the FT looks at the full scale of the impact on Northern Ireland as this integration is unwound. In a six-page assessment by David Sterling, the head of the region’s civil service, his letter warns that Northern Ireland faces “grave” consequences if the UK undoes more than four years of integration with the EU and crashes out with no-deal, characterised by a “sharp increase in unemployment”, a rise in electricity prices and the risk of social unrest.
As the letter reaches the desks of the leaders of Northern Ireland’s political parties, it will no doubt crank up the pressure on Arlene Foster and the DUP, who hold significant influence over Theresa May’s success or otherwise in getting her deal through the Commons next week
The party, which has made noises that suggests it may be on a journey towards softening its opposition to the Irish backstop, will certainly want to avoid the accusation of being the chief culprit were Sterling’s prediction to come to fruition of “a profound and long lasting impact on society”, as well as the forecasted 9.1% shrinkage in the economy over the next 15 years.
Looking even further ahead, I can’t help but wonder what someone will make of it all if they ever come across the papers of today when clearing a dusty loft in the year 2065…


Theresa May is to promise parliament a say over changes to workers' rights after Brexit, as the prime minister attempts to woo Labour MPs to support her deal on leaving the EU. MPs will be asked to vote on whether to adopt any new protections introduced on the continent and to stay aligned with EU standards.
New satellite images appear to show that North Korea is restoring a rocket launch site it had previously pledged to dismantle. The images, taken two days after talks between the leaders of the US and North Korea ended without an agreement, appear to show that rapid progress has been made in rebuilding structures on the rocket launch pad at the Sohae site at Tongchang-ri, having previously carried out work to dismantle it.
Michael Bloomberg, the billionaire former New York City mayor, has joined Hillary Clinton in ruling out a run for the White House, citing a crowded Democratic field that is increasingly pulling to the left. In an opinion piece published by his Bloomberg News service, the 77-year-old expressed his confidence that he could defeat Donald Trump in a general election, but said that he was unlikely to get the chance in what is being seen as another sign of the eroding middle ground of US politics. (£)

Business & Economy

The governor of the Bank of England has called on the UK government to stop issuing inflation-linked gilts using the discredited retail prices index, and to start using the consumer prices index instead. Mark Carney urged Philip Hammond, the chancellor, to end the “absurd” use of RPI six years after errors were found in the way it is measured. The Office for National Statistics can make a recommendation of changes to RPI with the chancellor having the final say over the decision. (£)
The uncertainty over the UK’s departure from the EU is leaving carmakers “on death row”, their executives have warned. Speaking on the first day of the Geneva Motor Show, bosses said that the lack of clarity over the current situation was “not good enough” and warned of the severe consequences of a no-deal Brexit. Despite this, Bentley has said that it will keep its car production in Britain and won’t shut its factory in Crewe.
A review by finance experts has warned that the system allowing people to use cash in the UK is at risk of "falling apart" and called on the government and regulators to step in to ensure that notes and coins can still be used. The Access to Cash Review suggests ensuring rural shops offer cash-back and arguing that essential services, such as utility and council bills, should still allow customers to pay in cash.


What happened yesterday?

Fears over the UK's economic growth following some subdued service sector data caused the pound to fall yesterday, in turn allowing the FTSE 100 – which comprises a significant number of companies that earn overseas - to outperform its European counterparts. London’s blue-chip index closed up 49.04 points, or 0.7%, at 7,183.43, while the FTSE 250 ended up 31.71 points, or 0.2%, at 19,443.14.

Some of the bigger winners on the FTSE 100 included bookmaker GVC Holdings, which saw shares rise 7.1% following a well-received set of annual results. Vodafone also had a good day, closing up 2.3% after the telecommunications giant confirmed that it plans to raise around €4 billion through the issue of mandatory convertible bonds to fund its acquisition of some assets from US cable firm Liberty Global.
On the more UK-focused FTSE 250, outsourcing firm Interserve saw shares rise 12%, while GoCompare shares gained 8.4% after the company’s chair Peter Wood upped his stake in the price comparison firm to just below 30%.
It wasn’t such a good day for Debenhams, with the retailer falling 6.0% after conceding that it no longer expects to deliver annual profit in line with market views following a decline in sales in the first half of the financial year.
The pound, mostly flat earlier in the day, dropped 0.6% to a one-week low of $1.3097, before regaining some ground to be quoted at $1.3137 at the London equities close. Against the euro it was up 0.15% to €1.1643.

Tritax Big Box Reit
BATM Advanced Communications Ltd.
Costain Group
FDM Group (Holdings)
Foresight Solar Fund Limited
Glenveagh Properties
Headlam Group
Just Eat
Legal & General Group
Paddy Power Betfair
Seplat Petroleum Development Company (DI)
Secure Income Reit
VR Education Holdings
Vivo Energy

Allergy Therapeutics
Hazel Renewable Energy VCT 1
Hazel Renewable Energy VCT 2
Redhall Group
Int. Economic Announcements
(12:00) MBA Mortgage Applications (US)
(13:30) Balance of Trade (US)
(15:00) Factory Orders (US)
(15:00) New Homes Sales (US)
(15:30) Crude Oil Inventories (US)

Columns of Note

Writing in the Financial Times, Martin Wolf says he understands the merits of the European Central Bank in deciding to halt asset purchases but says that the constraints upon effective action — both monetary and fiscal — are a permanent danger to stability and that they must reconsider the policy to stop the eurozone from slipping into another recession. (£)

The Times’ Roger Boyes warns that Pakistan’s alliance with Saudi Arabia could trigger an arms race throughout the Middle East, and says that the imperative is now on the West to unite around a plan that heads this threat off. (£)

Did you know?

During WW2, Britain shipped most of its gold reserves and foreign securities to Canada in crates labelled as ‘fish’. They were stored for years in an office building in downtown Montreal, where about 5,000 people worked throughout the war without having a clue about what was hidden in their basement.

Parliamentary highlights


House of Commons
Oral questions
Northern Ireland

Prime Minister’s Question Time

House of Lords
Oral questions
Ensuring the UK maintains gender equality and rights in the workplace in line with other EU member states – Baroness Crawley

Review of the Prevent strategy – Lord Sheikh

Contract to build five Type 31e frigates – Lord West of Spithead

USA’s negotiating objectives for a future trade deal with the UK – Lord Hunt of Kings Heath

Scottish Parliament
Portfolio questions
Finance, Economy and Fair Work

Environment, Climate Change and Land Reform

Scottish Conservative and Unionist Party Debate: Early Years

Scottish Conservative and Unionist Party Debate: Supporting Scottish Agriculture


House of Commons
Oral questions
Digital, Culture, Media and Sport (including Topical Questions)

Attorney General

Business Statement
Business Questions to the Leader of the House - Andrea Leadsom

House of Lords
Oral questions
Reducing the risk of female genital mutilation for girls in the UK and internationally - Baroness Jenkin of Kennington

Bringing section 106 of the Equality Act 2010 into force - Baroness Gale

Increasing the number of black and minority ethnic women in leadership positions in Russell Group universities in England. - Baroness Falkner of Margravine

Humanitarian assistance for women and girls in Yemen - Baroness Hayman

Scottish Parliament
General Questions

First Minister’s Questions

Scottish Government Debate: Local Government Finance (Scotland) Order 2019

Scottish Government Debate: International Women’s Day 2019: Balance for Better