8 June 2018

@lyle_h_hill

8 June 2018

Good morning,

Another day has gone by in the countdown to Brexit, and as appears to be the case so often, it was spent with political commentators watching open disagreements at the heart of government.

Yesterday, Theresa May needed two meetings with her Secretary of State for Exiting the European Union, David Davis, to thrash out a deal on the wording of a proposed time limit on any 'backstop' agreement with the EU.

The basic logic was as follows: if there was no explicit date in the document when it was published, Theresa May and Downing Street would have 'won' the negotiations; if there was, David Davis could be hailed victorious. Without a date, David Davis appeared to be threatening resignation.

When the document eventually appeared, published on the government website, it looked as if the prime minister had blinked first. But on closer analysis, despite a date, the wording was ambiguous at best. A fudge, according to Laura Kuenssberg, Sam Coates of The Times and the front page of The Sun...

And it wasn't long before more drama at the top of the Cabinet took their attention. In a leaked audio recording from a private dinner, Boris Johnson has openly cited his concerns over Brexit, warning that there was a "very, very difficult" struggle at the heart of government over the negotiations.

Perhaps this was the most obvious statement he made, and despite commenting that he was "disappointed" about the leak, many Brexit supporting colleagues will be happy that his open displeasure has been made public.

Johnson also claimed that the Treasury was the "heart of Remain" and that a Trump-like figure may have done a better job at negotiating Brexit than his colleagues. He said as he watched the Trump presidency, he had become "more and more convinced that there is method in the madness".

All of this ahead of the crucial vote next Tuesday in Parliament means that this saga has a long way to go yet.

News

The BBC has been found to still pay two-thirds of its highest earning stars through personal companies, despite promising to curb the practice in 2012. The BBC paid out more than £74 million using this method in the last four years, thought to have enabled tax avoidance of up to £20 million.

President Putin has claimed that Russia's intervention in the war in Syria has been a"priceless" opportunity for the country to develop its new military technology. Russian officials said that more than 200 new weapons had been used since entering the war in 2015.

Dave Lewis, the chief executive of Tesco, has blamed business rates for the collapse of many businesses in the retail sector. He argued that the rates many have to pay on their buildings has caused problems in the sector and this is ultimately to the disadvantage of the consumer and the high street.

 

Business & Economy

Gavin Patterson is set to step down as chief executive of BT later this year following a shareholder backlash to recent results at the company. Jan du Plessis, chairman of BT, confirmed there was a "need for a change in leadership" to deliver the new strategy to turnaround the business.

TSB chairman Richard Meddings backed chief executive Paul Pester last night, saying that he had the "full confidence" of the board following the recent IT issues and his appearance in front of the Treasury select committee. Earlier in the day, chair of the committee, Nicky Morgan, had written to Meddings calling on him to "seriously consider" Pester's position.

The CBI has warned that unless the government actively pursues policies to lift investment and productivity in the UK economy, Britain risks being left in the "economic slow lane" in comparison to other advanced economies following Brexit. The group also downgraded growth this year from 1.5% to 1.4%.

Markets

What happened yesterday?

The FTSE 100 struggled yesterday, closing down almost eight points or 0.1% at 7,704.40.

Brexit rumours and uncertainty weighed down equities. On the currency markets, sterling swung throughout the day, hitting a two-and-a-half week high against the dollar, trading up at $1.346, before falling back. Against the euro, the pound rebounded to €1.1365, having hit a low of €1.132.

In company news, a rise in brent crude oil of two per cent to $76.89 led to a rally for stocks such as BP and Shell, that rose 2.2% and 1.51% respectively.

SSE had a good day, despite Ofgem ordering the company to pay £1m to a consumer redress fund after it provided inaccurate information to some prepayment meter customers.

Finally, Mitie shrugged off its turbulent turnaround year to impress investors with strong full year results.

Finals
Fastjet
First Property Group
Fuller Smith & Turner
Volex
 
AGMs
Honeycomb Investment Trust
Proton Power Systems
Telefonica SA
Time Out Group

 

nternational Economic Announcements
(07:00) Balance of Trade (GER)
(07:00) Current Account (GER)
(07:00) Industrial Production (GER)
(15:00) Wholesales Inventories (US)

Columns of Note

James O'Sullivan, writing in The Guardian, delves into the new novel 'The President Is Missing', co-authored by James Patterson and Bill Clinton. O'Sullivan lectures in digital arts and humanities at University College Cork and uses techniques to identify writing styles and who wrote the majority of the co-authored work, with interesting conclusions. A review of the book in the New Yorker can be found here.

Philip Collins, writing in The Times, argues that while many Tories can see the problem with taxation, and that it needs to be shifted from income to wealth in order to reform capitalism, they are too scared to take the risk for fear of "frightening their own kind".

Did you know?

In 2017, London City Airport admitted that Marmite was the most confiscated item from hand luggage at the airport.

Parliamentary Highlights

TODAY
 
House of Commons
 
No business scheduled
 
House of Lords
 
No business scheduled
 
Scottish Parliament
 
No business scheduled