30th October 2019
Written by Javier Maquiera, Associate
Edited by Laura Hamilton, Managing Partner
The first Brexit took place roughly 10,000 years ago, when the British Isles physically separated from the European continent after rising sea levels filled the English Channel and created the North Sea. At the end of the last ice age, Doggerland – as this forgotten landscape connecting Britain with the coasts of the Netherlands, Germany, and Denmark has come to be known – was a rich grassland for mammoth, aurochs, and red deer, as well as the home to Mesolithic hunter-gatherers leading nomadic lives. Although Doggerlanders were gradually forced out of their low-lying settlements by rising water (certainly a warning for the future), a tsunami from a submarine landslide is thought to have ultimately separated Britain from the continent, thus completing Brexit v1. Fast forward to 2019, modern “Brexhaustion” feels more like a slow-motion tsunami, although not the only big wave the European Union will have to surf in the next few months. While the EU27 have formally adopted a new extensionfor the UK’s withdrawal, some of the co-stars in this Brexit sequel are making way to a new cast led by the president-elect of the European Commission, Ursula von der Leyen. However, the start of von der Leyen’s mandate, who had been due to take office on 1 November, has been delayed until (at least) the beginning of December after the European Parliament rejected the commissioner nominees presented by France, Hungary, and Romania. Although the French and Hungarian replacements still have to go through the confirmation process, von der Leyen’s Commission is still waiting on Romania, where the recent government collapse has left no-one to nominate a commissioner candidate. Meanwhile, the Brexit extension granted by the EU means that the UK has to propose a commissioner, which could further delay the start of the new Commission. Whatever happens, the potential British candidate would join a College of Commissioners set to face some of the biggest trade and regulatory challenges in the history of the single market, not least because of the ongoing commercial war between the US and China and stronger data protection policies. Europe might not be as geographically united as it used to be back in the Doggerland years, but it will surely need stronger and more concerted positions to weather the global headwinds ahead.
UK MPs have voted to back an early general election on 12 December after months of deadlock over the country’s withdrawal from the EU. The bill, which is still to be approved by the House of Lords, could become law by the end of the week, after which there would be a five-week campaign. Prime minister Boris Johnson said he is ready to fight a "tough" general election that he hopes will give him the opportunity to get his Brexit deal passed.
The prime minister of Lebanon, Saad Hariri, has announced his resignationfollowing nearly two weeks of nationwide protests that put the country under lock-down. The demonstrations sparked after the national unity government led by the three-time prime minister had proposed further austerity measures amid rapid economic deterioration, debt and rising prices.
WhatsApp has accused the Israeli surveillance firm NSO Group of facilitating the government hacking activities into the phones of 1,400 users across four continents. Calling it an “unmistakable pattern abuse”, the Facebook-owned company said that senior government officials, diplomats, political dissidents, and journalists were among those targeted.
Business and economy
The UK’s gender pay gap for full-time employees rose from 8.6% in 2018 to 8.9% in 2019 in men’s favour, according to provisional data by the Office for National Statistics (ONS). Although the ONS has said that the increase is not statistically significant, the data reveals that there has been little meaningful change in the gender pay gap since 2012, especially between men and women in their 50s, where the difference in pay is more than 15 per cent. Boeing’s chief executive, Dennis Muilenburg, was accused of cover-up and “cutting corners” in the development of the 737 MAX during his hearing before the United States Senate commerce and transportation committee. The inquiry focused on emails sent in 2016 by the then chief test pilot, who showed concerns over the anti-stall device in the aircrafts, widely blamed for contributing to the two crashes that left a total of 346 people dead. A study by the National Institute of Economic and Social Research has found that Boris Johnson’s withdrawal deal will leave the UK £70bn worse off than if it had remained in the EU, concluding that growth would be 3.5% lower by 2029 under the agreement. The independent forecaster’s report also revealed that the proposed free-trade deal with the single market was somewhat worse for the UK’s economy than Theresa May’s.
What happened yesterday?
London stocks plunged on Tuesday as investors pondered an early general election in the UK for early December. The FTSE 100 was 0.34% lower at 7,306.26, while the pound was firmer both against the US dollar by 0.13% at 1.2878 and versus the euro by 0.07% at 1.1594. In equity markets, BP (-3.80%) was the standout loser after the energy company’s third-quarter profits plunged by 41 per cent amid lower oil prices and upstream earnings, as well as a fall in production due to weather impact. Food delivery service Just Eat (-1.66%) and Royal Mail (-4.82%) were also trading lower. On the upside, the retail financial bookie Plus500 (+5.50%) rallied after reporting a 10 per cent jump in Q3 revenue as customer numbers grew. Across the Atlantic, the S&P 500 reversed morning gains to finish 0.1% lower as investors expect an interest rate cut from the Federal Reserve this week. The Nasdaq Composite was down 0.6%.
Whats happening today?
ANGLE Ashoka India Equity Investment Trust Plc Frontier Dev Goldplat Hargreaves Serv Ideagen Pantheon International Redde Sensyne Health
UK Economic Announcements
(00:01) BRC Shop Price Index
(07:00) Nationwide House Price Index
Intl. economic announcements
(08:55) Unemployment Rate (GER) (10:00) Industrial Confidence (EU) (10:00) Consumer Confidence (EU) (10:00) Economic Sentiment Indicator (EU) (10:00) Business Climate Indicator (EU) (10:00) Services Confidence (EU) (11:00) MBA Mortgage Applications (US) (12:30) GDP (Preliminary) (US) (14:30) Crude Oil Inventories (US)
Columns of note
Writing in The Guardian, Nobel prize winners Esther Duflo and Abhijit Banerjee call for a more honest and humane approach to economics to change the world. They argue that understanding what undermines trust in economists is a key first step to turn economics into a source of hope. Duflo and Banerjee conclude that the tendency of experts to adopt a narrow notion of wellbeing is a distorting lens that has often led good economists down the wrong path, and policymakers to the wrong decisions. The Times’ Roger Boyes writes that the death of Abu Bakr al-Baghdadi does not put an end to Isis, as the sophisticated terror group works on the basis of semi-autonomous, delegated management. If anything, a merger between parts of Isis and Al Qaeda could be on the cards after some of the obstacles preventing the union between both terrorist groups have been removed. The realisation that the physical caliphate no longer exists could lead Daesh foot soldiers to join a reinvigorated Al Qaeda; an outcome that will have a global impact, concludes Boyes. (£)
Did you know?
Raw salmon is not a classic sushi ingredient. It gradually became popular only after Norway started selling farmed parasite-free Atlantic salmon to Japan in the early 1990s.
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