8 December

@scott

Good morning,

You would be forgiven for not noticing as the headlines spent another news week pivoting between Brexit and Trump-related fiascos, but a significant milestone passed by relatively unnoticed this week for one quiet corner on Europe’s northeastern frontier.
 
On Wednesday, Finland celebrated its 100th anniversary as a nation state.
 
Emerging from the unfolding chaos of the Russian revolution, Finland has since quietly got on with a non-radical, social democratic agenda that has often gone unnoticed in the international press. The country is probably best, but vaguely, known for its regular appearance near or at the top of a host of international rankings.
 
Just take your pick – best school performers in math, science and reading, the second most equal country in the world for gender pay, and even the first country in the world where fathers spend more time with children than mothers. The country’s take on the ‘Nordic model’ has made it one of the fairest societies in the world, lately making the comment sections for its controversial, if pioneering experiment to introduce a universal basic income for its citizens.
 
Yet amid the celebrations on Wednesday, Finns will have taken note of news ushering in a chilly wind from the east – Vladimir Putin made the long-expected announcement that he will seek a new six-year term as Russian president in elections due for March next year.
 
Signaling a continuation of Russia’s aggressive foreign policy interventions in the region, Putin’s re-election would ask serious questions of Finland’s longtime adherence to a policy of ‘active neutrality’. Although now a member of the EU, the country has distinguished itself from its Baltic neighbors by remaining outside the NATO agreement since its creation in 1949. If the Russian bear was to turn its gaze to its northwestern flank - as some now fear - Finns may once again have to revisit the manner of their independence for a new era.
 
For now, the country should bask in a reputation that has made it the envy of western society. In an age where soft power carries greater weight than Russia may care to admit, Finns may yet show how small nations can punch above their weight in the 21st century.

News

Britain has reached a historic deal on its EU exit terms, enshrining special rights for 4 million EU citizens and paying a €40-€60 billion divorce settlement which now clears the way for trade talks to begin next year. Theresa May and Jean-Claude Juncker, president of the European Commission, met early on Friday to sign off a 15-page ‘progress report’. Arlene Foster, leader of the Democratic Unionist Party, said she that had secured ‘substantial changes’ to the text on the Northern Irish border, an issue which had blocked agreement in previous talks.
 
The leader of Germany’s main centre-left party has called for EU member states to commit to a federal ‘United States of Europe’ by 2025 or otherwise leave the bloc. Martin Schulz, whose party is currently in talks to agree the formation of a new grand coalition with Angela Merkel’s Christian Democrats, also called for further investment in the Eurozone budget, setting out an ambitious and strongly pro-European platform in the hope of influencing talks.
 
Coventry has been named the next UK City of Culture, making it the third holder of the title from 2021 after Londonderry and Hull. It was chosen over Sunderland, Stoke-on-Trent, Paisley and Swansea by a Department for Digital, Culture, Media and Sport panel, and is awarded a £3 million Heritage Lottery fund grant to start fundraising for its artistic plans.

Business & Economy

General Electric has announced that more than 1,100 jobs are to be cut at sites in the UK, amounting to a nearly 8 per cent drop in its 18,000-strong workforce. GE said the cuts were part of a broader programme to reduce global staff by 12,000 in its power divisions, prompted by a fall in demand for new energy plants and a drop in investment by its traditional utility customers. The UK cuts will primarily affect sites in Rugby and Stafford, where GE’s sites are currently earmarked for closure.
 
Primark and Sports Direct have been ordered to repay thousands of pounds to its employees after data revealed the firms to be paying below the minimum wage. Primark is to repay nearly £232,000, mainly due to charging staff for uniforms, while Sports Direct and two staff agencies it used are to pay back a total of more than £1.1 million to its workers. The retailers were named as the worst offenders of a list of 260 firms investigated by HM Revenue and Customs.
 
Bitcoin briefly crossed through the $17,000 mark in Asian trading, extending its record breaking run and stoking fears of a looming bubble in the cryptocurrency. Bitcoin’s value has soared 70% this week alone as digital currency speculators created the biggest buying rush in history, although finished trading yesterday around the $15,000 level. The value of one unit rose by as much as $6,900, or 52 per cent, on some exchanges during the course of yesterday’s trading.

Markets

What happened yesterday?

The FTSE 100 underperformed its peers on the continent, while the pound has reacted to tentative optimism on talks over the Irish border dispute. The market closed at 7320.75 points, down 0.4% on the previous day’s performance.
 
Top dog on the market was publisher Pearson, which added 2.22% to finish up at 737p, while Babcock International Group saw the biggest fall, losing 3.27% to close at 654.5p. Big cap miner Rio Tinto was also lower, shedding 1.66% to 3,440.50p as the sector saw pressure from worries over declining demand during the winter period.
 
The pound broke a two-day losing streak to move higher against its American and continental counterparts, finishing up 0.3% at $1.34 on the dollar and 0.2% at €1.14 on the euro. 

Finals
Finsbury Growth & Income Trust
 
Interims
Berkeley Group Holdings (The)
 
AGMs
Associated British Foods
AXA Property Trust Limited
DX (Group)
Quadrise Fuels International
River and Mercantile Group
Softcat

Trading Announcements
John Laing Group

UK Economic Announcements
(09.30) Balance of Trade
(09.30) Industrial Production
(09.30) Manufacturing Production
 
International Economic Announcements
(07.00) Balance of Trade (GER)
(07.00) Current Account (GER)
(13.30) Non-Farm Payrolls (US)
(13.30) Unemployment Rate (US)
(14.00) U. of Michigan Confidence (Prelim) (US)

Columns of note

Writing for The Times, Ed Conway argues that the row over the Irish border in Brexit discussions has ignored an increasing divergence between all home nations of the UK. Far from synchronizing arrangements after Brexit, he suggests that the EU was a lynchpin in preventing further divergence. In particular, Conway suggests that Northern Ireland is already more integrated with the Republic of Ireland over issues such as energy, housing, taxes and customs arrangements.
 
Looking at the publication of a new intervention in the economic debate, Capitalism Without Capital by economist Jonathan Haskel and innovation researcher Stian Westlake, John Harris interrogates the rise of ‘platform capitalism’, where companies are able to grow without holding the capital base of their activities. Writing for the Guardian, Harris concludes that this next stage of capitalist development will only exacerbate inequality. 

Did you know?

In addition to having one of the highest coffee consumption rates in the world (12kg every year, no less), the Finns also consume the most milk – around 1 litre per person every day. This is doubly impressive given 17% of Finns are also lactose intolerant.

Parliamentary highlights

TODAY
          
House of Commons
No business scheduled
 
House of Lords
Debate
Role of education in building a flourishing and skilled society – The Lord Archbishop of Canterbury
 
Scottish Parliament
No business scheduled