Cast your mind back to this time last year. Theresa May was coming under increasing pressure to set out where she stood on Britain's future trade agreements, the New England Patriots had reached another Super Bowl and Donald Trump faced accusations that he was making things all about him when he floated the idea of receiving his very own military parade after enthusiastically watching one afforded to Emmanuel Macron. You might say: ‘the more things change, the more they stay the same’.
It’s a sentiment shared by South Africans this morning as they prepare for President Cyril Ramaphosa’s state of the nation address later today. This time 12 months ago, Ramaphosa was carried into office on a wave of optimism following the departure of Jacob Zuma; he promised a "new dawn" built on economic revival and a fight against endemic corruption.
A year on, the ‘Ramaphoria’ that greeted the new leader has died down, with commitments on jobs, tackling inequality and economic growth falling behind target. Unemployment remains stubbornly high at more than 27%, with more than half of the country’s 15 to 24-year-olds out of work. The launch of a youth employment scheme designed to generate 330,000 new jobs a year was lauded as one answer, but the sum of its efforts so far has been the creation of a rather less impressive 2,000 posts. It’s a similar story for the South African economy, with no growth at all. Progress on the ambition to attract US$100 billion in overseas investment over the next five years has also hit the skids. To make the struggle worse, five European countries last weekend told the SA government that it must play by the legal rule book if the country is to earn their investment.
That’s not to say Ramaphosa can’t point to some victories when he stands up to deliver his speech – he has made inroads in weeding out the internal corruption that brought down the previous administration – and he isn’t the first president to become a victim of their own weighty expectations.
Unfortunately for him though, tackling bribery and fraud doesn’t exactly rank high in the priority list for South Africans going day-to-day as they try to scrape a living and with elections looming in May, the former trade union leader-turned-billionaire is fast running out of time to prove to the country that he is the man to lead South African to prosperity.
The theme of today’s address is ‘Following up on our commitments - Making Your Future Work Better’. It’s a familiar trick for governments – talk only of the future. However, one wonders whether it’s now time for South Africa’s government to think beyond these platitudes and think more about the lives of its citizens today, and less about tomorrow.
Theresa May is to travel to Brussels today where she is expected to tell EU leaders that they must agree to changes in the Brexit deal or face having no deal at all. The prime minister will insist the UK will not be "trapped" in the backstop and the EU must agree to reopen the withdrawal agreement when she meets Jean-Claude Juncker, president of the EU Commission. Jeremy Corbyn has written to the PM to set out five demands for his party to support a Brexit deal.
The Air Accidents Investigation Board (AAIB) has confirmed that a body has been recovered from the wreckage of the plane that crashed carrying Cardiff City footballer Emiliano Sala. The body has been identified and will be formally confirmed by the coroner or the police. Meanwhile, it has emerged that Sala's former club, French Ligue 1 side Nantes, has demanded Cardiff City pay his £15m transfer fee. (£)
US President Donald Trump has said that he expects a formal announcement as early as next week to confirm that the coalition fighting Islamic State in Iraq and Syria has reclaimed all of the territory previously held by the extremist group. Earlier in the day, US Secretary of State Mike Pompeo reassured the 79 countries that comprise the coalition that the withdrawal of US troops from Syria was not "the end of America's fight" and called on them to help permanently defeat ISIS.
Research by the Met Office and Nasa has found that climate change has made the past five years the hottest on record, with 2018 being the fourth-warmest since modern records began. The UK Met Office has warned that the next five years will form part of the warmest decade on record, while Nasa found that warming is greatest in the Arctic, which has seen a loss of sea ice. (£)
Business & Economy
The energy regulator Ofgem has announced the average bill for customers on standard variable gas and electricity rates will increase by an extra £117 a year, following a rise in wholesale energy prices. The four million people on prepayment meters will also see their price rise by £106 from the previous cap level. Changes will come into force from April this year.
Music streaming company Spotify unexpectedly unveiled its first quarterly profit yesterday but warned that losses for the rest of this year could total €360 million as it embarks on an expansion of the business. Spotify, the world’s second largest podcasting platform, announced it would spend between €400 million and €500 million on a number of acquisitions in 2019. (£)
Société Générale has become the latest French lender to take action in the face of gruelling market conditions after it lowered its financial targets and announced it will cut €500m in costs from its investment bank. SocGen’s initial 11.5% target on return on tangible equity will be revised to between nine and 10 per cent by 2020, and it would not meet its three per cent revenue growth target. (£)
What happened yesterday?
A lacklustre day of trading yesterday saw the FTSE 100 have a rather flat day. London’s blue-chip index closed 0.06% lower at 7,173 points, with Ocado being the day’s biggest faller. The online retailer was down 6.3% at the close of trading after a fire at a distribution centre affected growth plans for the rest of this year.
It was a different story for Barratt Developments, with the housebuilder seeing a rise of 2.8% as investors welcomed its latest profit figures.
The more UK-focused FTSE 250 ended the day on 19,073.41 points, a small rise of 0.41%. Across the pond, participants of the S&P 500 found little to be excited about in Donald Trump’s State of the Union address and this contributed towards a fall of 0.22%. On the currency markets, Sterling was flat against the dollar at $1.2944 and was up 0.41% against the euro at €1.1383 at close of trading.
Kcell Joint Stock Co GDR (Reg S)
Novolipetsk Steel GDS (Reg S)
Smith & Nephew
Supermarket Income Reit
Gem Diamonds Ltd. (DI)
On The Beach Group
OMV Petrom S.A. GDR (REG S)
Thomas Cook Group
UK Economic Announcements
(08:30) Halifax House Price Index
(12:00) BoE Interest Rate Decision
Int. Economic Announcements
(07:00) Industrial Production (GER)
(20:00) Consumer Credit (US)
Columns of Note
Geoffrey Owen, head of industrial policy at Policy Exchange and a former FT editor, writes in his former paper that the British motor industry is in the throes of another crisis. He writes that uncertainty over Brexit, over-production and declining demand from China has left its future far from certain and states his belief that the industry of car production is too important for politicians to fail to intervene. (£)
Gerard Baker says the thing that was most striking about Donald Trump’s state of the union address was how mainstream it was. Writing in The Times, Baker argues that Trump came to office promising to break all the rules, but halfway through his term he is sounding like his 44 predecessors. However, he concludes that economic progress and his record of making conservative appointments to the courts – with some partisan baiting on social media thrown in for good measure – should keep his base happy enough.
Did you know?
Hawaii has the lowest maximum temperature of any US state, having never recorded a temperature above 38℃.
House of Commons
Women and Equalities
Leader of the House of Commons
Closure of Santander banks
House of Lords
Ensuring the Cross-Government Prosperity Fund is being used to achieve UN Sustainable Development Goals - Lord Collins of Highbury
Number of additional food inspectors to ensure EU food imports are checked at transit ports in the event of a no-deal Brexit - Baroness Jones of Whitchurch
Protecting patients from counterfeit medicines after the UK has left the EU - Baroness Walmsley
Assisting Venezuela in holding a free, fair and democratic presidential election
Finance (No.3) Bill – Second reading and all remaining stages – Lord Bates
First Minister’s Questions
Glasgow City Region Deal
Stage 1 Debate
Management of Offenders (Scotland) Bill
House of Commons
A number of Private Members' Bills
House of Lords
No business scheduled
No business scheduled