8 November


8 November

Good morning,

The decision by Nutella to tweak the recipe of its spread may have caused “choc horror” on social media. But the notion of changing the formula perhaps provides a useful way of looking at things when it comes to the nature of a trade relationship between China and US, ahead of a meeting between the leaders of the two powers later today.

As Air Force One touched down in Beijing this morning, Donald Trump is under pressure to demand China do more to balance trade with America when he sits down with the recently-empowered President Xi. Ahead of his first official visit to the country as president, Trump briefed that he will take 'very, very strong action' against countries treating the US “unfairly” in the trade arena, an attack aimed principally at China.

A recent report showed that the two nations are now each other's largest trading partner, with China having purchased more than $165 million in goods and services from the United States in 2015, and an estimated 2.6 million jobs in the United States supported by US-China trade relations.

Trump has already made attempts to tackle the trade deficit - which stood at around $347 billion in 2016 - while in office. Washington has increased duties on a number of Chinese goods to offset what it says are improper subsidies, and Trump has tasked his top trade representative to investigate China’s alleged theft of U.S. intellectual property.

Some American companies have raised concerns that Trump's focus on trade in goods might mean that he pays too little attention to other issues, such as Chinese rules that limit their presence in finance, health care and other service industries.

On this issue, despite being a critic of what he considers a “failing” newspaper, Trump may want to read yesterday’s New York Times, which set out the extent of China’s global ambitions to dominate cutting-edge technologies like artificial intelligence and electric cars. Under the banner of the “Made in China 2025” programme, the country’s leadership aims to set out a roadmap that they believe will lead them to a global status appropriate with its economic influence.

As he celebrates the anniversary of his election victory, overseeing a shift in the global trade order towards the East would be a difficult reality to sugarcoat for the ‘America First’ president.


The BBC report that Priti Patel’s departure as international development secretary "may be imminent", after new information came to light that she conducted further meetings with Israeli officials.

Home Secretary Amber Rudd is leading a push to remove students from the government’s net migration data. While this decision is likely to please universities, it contradicts the position of Theresa May, who believes that students must be counted in the target. The Home Secretary has cabinet support for the policy, and one minister said that the Prime Minister was “in a minority of one”. (£)

The Prince of Wales’s private estate has invested millions of pounds in offshore funds and companies, according to documents in the Paradise Papers leak. MPs have now urged transparency after the Paradise Papers showed that Prince Charles held a stake in a forestry firm as he campaigned on climate change.

Business & Economy

A number of large financial institutions with significant operations in London, led by Wall Street’s most prominent banks, have told the US commerce secretary that they may need to move thousands of jobs out of the City as a result of the unstable UK government and the slow progress in Brexit negotiations. (£)

John Cryan, the chief executive of Deutsche Bank, has delivered the strongest hint yet that the bank could cut tens of thousands more jobs as it looks to technology to lower costs and boost efficiency in the bank’s processes. Cryan’s comments come against a backdrop of sharply reduced revenues at the bank. (£)

SSE and npower said yesterday that they were “in advanced discussions on combining their retail activities”, a move that would see the Big Six energy companies that have dominated the market for 15 years turn into five. SSE is currently Britain’s second largest household energy supplier, while npower is the country’s sixth largest. (£)


What happened yesterday?
The FTSE 100 yesterday closed 49.17 points down at 7,513.11, with the world's largest security group the biggest faller on the index. Shares in G4S dropped nearly 5% after it downgraded its revenue growth forecast following a disappointing performance in the Middle East and Asia.

The day wasn’t much better for AB Foods, the owner of Primark, after they saw a slump in shares of more than 3.7% despite posting a rise in profits. A reduction in profits at its sugar business due to lower EU prices was considered the principal factor in this decrease.

Oil prices creeped lower again after a surge on Monday, following moves by Saudi Arabia's crown prince to tighten his grip on power at the weekend. Brent crude dropped back below the $64-a-barrel mark to $63.81 on Tuesday, while US crude dropped 0.4% to $57.15 a barrel.

On the currency markets, the pound fell 0.2% against the dollar to $1.3146 but it had a slight increase of 0.09% against the euro to €1.1356.


JZ Capital Partners Ltd
Marks & Spencer Group
Sophos Group
Schroder Real Estate Investment Trust Ltd
Wizz Air Holdings
Workspace Group

UK Economic Announcements
(23:01) RICS Housing Market Survey

International Economic Announcements
(12:00) MBA Mortgage Applications (US)
(15:30) Crude Oil Inventories (US)

Columns of Note

At a time of “too much news”, Alex Massie writes in The Spectator that we have a “fake government”. Reflecting on the recent behaviour of Boris Johnson and Priti Patel, Massie says that we have a government that fails to inspire confidence even on its own benches. (£)

Daniel Finkelstein reviews Gordon Brown’s recently published memoirs in The Times. Finkelstein lays the blame the rift between Brown and Blair that characterised much of their decade in government at the door of the former chancellor, and believes that is a belief shared by many. He tells Brown “that even if people buy your book, I don’t think you’ll find many who will buy your version of the past”. (£)

Did you know?

There are more possible iterations of chess games than there are atoms in the universe. This value, known as the Shannon Number, represents all of the possible move variations in the game of chess. It is estimated to be between 10^111 and 10^123, while there are 10^81 atoms that make up the known universe.

Parliamentary highlights


House of Commons

No business scheduled

House of Lords

No business scheduled

Scottish Parliament

Portfolio Questions
Rural Economy and Connectivity
Environment, Climate Change and Land Reform

Stage 3 Proceedings
Child Poverty (Scotland) Bill

House of Commons

No business scheduled

House of Lords

No business scheduled

Scottish Parliament

General Questions

First Minister's Questions