9 November 2018

Iain Gibson

9 November 2018

Good morning,

The ageing populations in the west and the developed far east have been a policy headache and easy news fodder for some time now. Not unreasonably, the focus has been on the cost of caring for an ageing baby boomer generation, not to mention the neverending uncertainty over who will be able to claim what pension and when.  

However, what we rarely talk about are the potential problems that can arise after death, when cremation or burial is not immediately available. This is where the Lastel hotel in Tokyo comes in, where in order to stay, you have to be dead.

What sounds like a quirky choice is in fact more of a necessity: the hotel is overbooked as the death rate in Japan continues to rise. Last year over 1.3m people died in the land of the rising sun, around double the number from fifty years ago. Tokyo, by far the largest city, only has 20 licensed crematories and the situation is similarly problematic in Japan’s other urban areas. So the Lastel has tapped into a real need for families to put their loved ones in a secure, safe setting, whilst they move up a waiting list to hold a proper ceremony of remembrance.

If it sounds ghoulish to dine next to a Perspex-encased corpse, and there has been opposition to these hotels in some quarters, the problem of cadaver storage is real. Other countries are facing similar issues. Authorities in London have  begun overhauling a burial system largely unchanged from the Victorian era, when the population of the city was  a fraction of what it is today, and the options for expanding cemeteries limited.

Japan provides us with an extreme example. Its demographic problem is worse than any other developed nation, partly because its post-war baby boom was more marked – 33% of the population is over 60 and a quarter is over 65. By 2050 more than a third will be over 65, and the population is projected to shrink by more than 20% (from 127m to 107m) over the same period – a lot of cadavers to deal with.

Given the projected population shrinkage, we could argue that places such as the Lastel hotel will not be necessary by the middle of the 21st century – by which time Japan may have different issues, in particular, productivity. 

The wider point is that while few would have predicted the need for the services offered by the likes of the Lastel even a couple of decades ago, who knows what scenarios we will be contemplating decades from now. It certainly keeps life – and now, it would seem, also death – interesting.  


A report from leading accountancy firm PwC has found that over 2,600 stores have disappeared from Britain’s top 500 high streets in the first six months of 2018, offset by the opening of slightly over 1,500 – equivalent to a net loss of 14 a day. PwC has predicted that the situation for the second half of this year is likely to be even worse.

According to sources close to ministers, the UK Government may shortly abandon any efforts to find a company to build a new nuclear power station in Cumbria, north-west England. The development follows efforts to find a replacement for Japan’s Toshiba, which is now in the process of liquidating the UK subsidiary that was intended to construct it. China’s state-owned nuclear group is said to be interested, although the UK Government remains cautious of this option.

The fallout from the US midterm elections continues in two gubernatorial contests – there are rumours that the Florida race (thought to have been narrowly won by Republicans) is heading towards a recount while it now seems possible there could be a whole new ballot in Georgia, following the resignation of winning Republican candidate Brian Kemp as secretary of state.

Business & Economy

KPMG has confirmed that it will cease to undertake non-audit work for its FTSE 350 audit clients, in a bid to stem the fallout from high-profile cases such as Carillion, where the company was both auditor and simultaneously earned millions of pounds in non-audit work. This practice is commonplace among ‘big four’ accountancy firms and has invited accusations that audits may have overlooked certain issues in order to retain other business. KPMG is the first of the big four to take this step. 

Canadian plane and train maker Bombardier announced that it was cutting 5,000 jobs globally, increasing uncertainty at plants in Derby and Belfast. 3,000 of these jobs will be in Quebec and Ontario, although it is not yet clear where the remainder will take place. Bombardier said the changes would come into effect over the next 12 to 18 months. The company employs 70,000 people globally, including 4,000 in Belfast and over 1,600 in Derby. 

The US Justice Department has filed a lawsuit against Swiss bank UBS, regarding its behaviour in the run-up to the 2008 financial crisis. The suit specifically relates to conduct around residential mortgage-backed securities and has been lodged after talks to determine compensation broke down.


What happened yesterday?

In the US, a drop in oil prices impacted energy stocks and saw the market bounce that followed the midterm elections come to an end. The S&P 500 finished 0.3% lower and the Nasdaq Composite declined 0.5%. The Dow Jones Industrial Average remained flat. Meanwhile the Federal Reserve’s announcement that it would keep interest rates unchanged, a decision that most had expected, was a contributory factor in the dollar rising slightly.

In Europe, the FTSE 100 was buoyed by good earnings from drugmaker AstraZeneca and from Coca Cola, ending the day up 0.3% overall. The pan-European Stoxx 600 index was also up slightly, at 0.2%. 

Japanese stocks were among the best performing in Asia, with the Topix up 1.7% and the Hang Seng in Hong Kong rising 0.3%, driven largely by tech stocks.

Q3 Results
Grupo Clarin
Galliford Try
UK Economic Announcements
(00:00) Balance of Trade
(09:30) GDP (Preliminary)
(09:30) Gross Domestic Product
(09:30) Index of Services
(09:30) Industrial Production
(09:30) Manufacturing Production 

International Economic Announcements
(13:30) Producer Price Index (US)
(15:00) U. of Michigan (Prelim) (US)
(15:00) Wholesale Inventories (US)

Columns of Note

Writing in the Financial Times, Janan Ganesh warns the US Democrats not to get too carried away by the results of the US midterms. The outcome was predictable, being largely in-keeping with the trend of a first-term president: lose the House of Representatives, retain the Senate. He cautions Democrats not to believe that there has been a widespread rejection of Donald Trump, which many were hoping would come at the first opportunity. Instead, he believes the Democrats should be cautious with their new-found power, apply pressure quietly and seek to carve out their own legislative agenda, rather than be over-zealous in their pursuit of President Trump from the minute the new house convenes in January 2019.

In The Guardian, Martin Kettle believes the British obsession with the midterms shows that we are already a kind of vassal state of the US and that “the British political class’s wide-eyed appetite for Americana should be challenged”. His key takeaway is that, because Trump was not completely repudiated, we should not be able to trust the US as our most important ally and instead we should be looking to cement international alliances elsewhere, starting with Europe.

Did you know?

Every second Sunday in August Turkmenistan has a national holiday – to celebrate the country’s melons. The occasion was established by the country’s then-President back in 1994.  

Parliamentary highlights

House of Commons

In recess until Monday 12 November

House of Lords

In recess until Monday 12 November

Scottish Parliament

No business scheduled