6th January 2020
Written by Katie Stanton, Senior Associate
Edited by Tom Gillingham, Associate Partner
Good morning, Inevitably, spending two glorious weeks cooped up with the same five family members leads to a chat drought. Banter reserves run perilously low; that same cup which once runneth over with witty repartee reduced to a paltry dribble of weather anecdotes and food shop strategising. So, when all else has failed and the latest bout of pregnant silence appears agonisingly infinite; a scorched road with only oblivion, tumbleweed and inspecting the grain of the dinner table for company, here is my measly solution. I aimlessly regurgitate news headlines and pray for discussion to manifest itself. And what may seem like casting a line into the black abyss, always gets a bite. My mum is a total newspaper nerd. Without fail, she has read the paper cover to cover. She takes great delight in one-upping me with bits of information I’ve missed or failed to register, peppering the conversation with flavour which should surely be beyond natural recall at her advanced age. In comparison, my younger sisters have much broader but far less detailed insight. They’ve got the headlines, the general gist, maybe a paragraph or two of extra fluff, but nothing more. You see, having grown up with information overload, social media and ubiquitous, inescapable news flow, the next generation is accustomed to skimming; to gathering trends rather than just detail. They have to, or risk drowning in tedious intricacies. So, what does it mean for the next decade, one which will see a generation never without smartphones, online gaming and social media reach the workforce? Certainly, a different skill set. Generation Z is brimming with big picture thinkers, purpose-driven problem solvers, adept information gatherers, personal development fiends, technology prodigies and, ultimately, leaders. Last year’s controversial Army recruitment campaign sought to capitalise on these “snowflake” skills. And service chiefs have hailed its success. The campaign has proven so refreshing for a generation relentlessly berated for sensitivity and laziness, that the monthly total number of recruits starting basic training in September was at its highest level since 2009. The Army’s new 2020 appeal aims to continue on this positive trajectory, bridging the chasm between the reward-culture of sites like Instagram – which sees users vying for “likes” – with the more meaningful rewards on offer with a career in the Army – namely, lasting self-confidence. Valuable skills are all too often obscured by obstinate scoffing about the vapidity and vanity of youngsters. Recognising the value in their changing skillset is vital to ensuring a workforce fit for the future.
President Trump has threatened severe sanctions against Iraq after its parliament called on US troops to leave the country. He told reporters: “we have a very extraordinarily expensive air base that's there. It cost billions of dollars to build. We're not leaving unless they pay us back for it.” Tensions are high following the US assassination of Iranian general Qassem Soleimani in Baghdad last week. Iran has vowed “severe revenge”. Meanwhile Boris Johnson has joined European leaders in calling for a “de-escalation” of tensions between Iran and the US after a senior commander in the Quds Force – the Iranian Revolutionary Guard’s international arm – told The Times that British soldiers could be “collateral damage” in attacks on the US military. (£)
Last night’s Golden Globes saw British victories across the board. The greatest success story was 1917, Sam Mendes’ technically audacious film following two British soldiers in the first world war, which won best picture – drama and best director. Other winners included Olivia Coleman and Phoebe Waller-Bridge.
Business and economy
Bosses of Britain’s leading firms will be paid more within three working days of 2020 than the average employee’s annual wage, according to research by the Chartered Institute of Personnel and Development and the High Pay Centre think tank. Business secretary Andrea Leadsom said the apparent pay gap was “concerning”. The number of new cars sold in Britain last year fell to its lowest level since 2013 as consumers held back from purchases amid increased restrictions on diesel vehicles and ongoing economic uncertainty in the run-up to Brexit. New car registrations dropped by two per cent in 2019 to 2.31 million, according to provisional data from the Society of Motor Manufacturers and Traders (SMMT). France has warned the US that it will face retaliation from the EU if it tries to impose “highly disproportionate” trade tariffs in response to its digital tax on the likes of Google and Amazon. French finance minister Bruno Le Maire is “in touch with the European commission and other EU member states on the subject” and they are “contemplating various options to defend our trade rights in a proportionate and determined manner”. (£)
Columns of note
In this week’s Atlantic, Anne Applebaum takes on Vladimir Putin’s big lie. In December, the Russian president brought up the subject of Polish responsibility for the Second World War no less than five times in a single week. Using the Second World War as a symbolic justification for his own authoritarianism, Putin’s excursion into obscure events in the distant past are likely to have catastrophic effects. He wants to make Russia not just great again, but “great” precisely as it was “great” in 1945, when the Red Army occupied Berlin. More, he wants to undermine the position and status of Poland itself, destabilising the whole post-Cold War settlement. But that, of course, has been the central goal of his foreign policy for two decades. Writing in Quartz, Youyou Zhou explains how fracking made it easier for the US to kill Iran’s Qassem Soleimani. The domestic fracking boom in the 2010s cut the share of US consumption of oil and petroleum products from imports to half its level two decades ago. More specifically though, the US became less reliant on oil from the Middle East – imports are a third of the level they were two decades ago.
The week ahead
Geopolitical concerns will continue to weigh heavily on stocks in the week ahead, with investors contemplating whether tensions in the Middle East will be the catalyst for a much-anticipated market pullback. Meanwhile, oil prices are expected to continue on their upward trajectory after US president Donald Trump threatened to impose sanctions on Iraq if the country expels American troops. Brent crude, which is an international benchmark for buyers and sellers of oil, rose 2.41% to $70.25 a barrel this morning. Key economic figures include PMI data from around the globe, along with eurozone inflation, Chinese CPI and monthly payroll reports from ADP. Some of the UK’s best-known retailers are reporting this week following the important Christmas trading period. Investors will be paying particularly close attention to Morrison’s, Tesco and Marks & Spencer’s online division amid tough competition in the grocery sector. In the US, analysts are hotly anticipating the December employment report which is expected to show that 160,000 payrolls were added, and average earnings rose 3.1% year-over-year. The report is particularly important following surprisingly negative manufacturing data from December’s ISM.
What's happening today?
UK Economic Announcements (09:30) PMI Services
Int. Economic Announcements (07:00) Retail Sales (GER) (08:55) PMI Services (GER)(08:55) PMI Composite (US) (09:00) PMI Services (EU) (10:00) Producer Price Index (EU) (14:45) PMI Composite (US) (14:45) PMI Services (US)
Did you know?
89% of Americans took out a phone during their most recent social interaction.
TODAY House of Commons No business scheduled. House of Lords No business scheduled. Scottish Parliament No business scheduled. TOMORROW House of Commons Oral questions HM Treasury (including topical questions) Legislation European Union (Withdrawal Agreement) Bill: Committee of the Whole House Adjournment Role of UK special forces in Iraq and Afghanistan – Stewart Malcolm McDonald House of Lords Oral questions Supporting the repair of Hammersmith Bridge – Lord Dubs Protecting opportunities to work in Europe for British citizens resident in the UK and abroad – The Earl of Clancarty Conservative party manifesto commitment to deliver 50,000 more nurses in the NHS – Lord Hunt of Kings Heath Debate on the Address Foreign affairs, defence, international development, trade, climate change and the environment Debate Report pursuant to section 3(5) of the Northern Ireland (Executive Formation etc) Act 2019 – Lord Duncan of Springbank Scottish Parliament Topical questions (if selected) Local Government and Communities Committee Debate Empty homes in Scotland