3rd January 2020

Written by Tom Gillingham, Associate Partner

Edited by Iain Gibson, Associate Partner

Happy new year, Perhaps I’m showing my age, but 2020 always seemed like the distant future - yet here we are, blinking in the grey light of another January. You won’t get any bold predictions from me this morning. As far as I’m concerned, the future we are living in is still disappointingly bereft of flying cars, moon bases and world peace. Rather than interplanetary exploration or holograms, I suspect conversations about the future at family tables might have at some point involved the issue of meat. Christmas is traditionally a period of carnivorous overindulgence, yet there are some signs that vegans might yet inherit the earth. The idea of reducing meat consumption to save the planet is nothing new, but as Australia continues to burn and we peer out into the strangely mild gloom of this midwinter morning, it does all feel a bit more urgent. The UN was exhorting us to drop the chop and pick up a carrot instead as far back ago as 2010, but for the first time, there appears to be real signs of behaviour change in the UK. New research shows that Brits ate 3.6 million fewer animals in the first half of 2019 (£). Before we all celebrate beating the meat, it is worth remembering that on current trends meat consumption is still expected to rise globally for the next 20-30 years. While this may sound dispiriting, I want to go back to some of the unrealised predictions that were mentioned a few paragraphs ago. Those incorrect predictions might just be cause for hope, despite the huge challenges we face. The idea that moon bases would follow the Apollo programme, or the expectation that flying cars were the logical next step after the boom in international air travel, are borne of the human predilection to assume lived experience will continue in a linear fashion. As Hans Rosling, Ola Rosling and Anna Rosling Rönnlund’s Factfulness explains, that’s why we are generally so bad at predicting the future Our Eeyore-like lived experience suggests catastrophic climate change is inevitable and that small lifestyle changes will fail to impact the wider world. But, in the spirit of optimism generated by the new year (and a one day working week) I wonder if we are, instead, starting to see the first signs that it might yet be possible to knock this terrifying trajectory towards a warmer world firmly off course.

News

General Qasem Soleimani, the head of the Iranian Revolutionary Guards' elite Quds Force, has been killed in a US airstrike outside Baghdad airport. The US holds the force responsible for the deaths of hundreds of US servicepeople and, in a statement, the Pentagon said: “At the direction of the President, the US military has taken decisive defensive action to protect US personnel abroad by killing Qasem Soleimani.” The Met Office reports that a number of high temperature records were broken in the UK in 2019 due to the ongoing climate emergency. The hottest temperature ever recorded in the UK was on 25 July in Cambridge, where the thermometer hit 38.7°C. The record for the hottest February day was also broken, with the hottest December temperature also looking likely to have been experienced on the 28th. A new fast-track DNA test called ‘whole exome sequencing’ is to be rolled out across the NHS in England. The technique is used for babies and children and scans for thousands of rare diseases, taking just 27 hours, instead of the previous process which used to take 10 days. It raises the prospect of quicker diagnoses of around 5,000 rare conditions.

Business and economy

It appears retailer Next has had a strong Christmas, with a trading update announcing full price sales have risen by 5.2% in Q2, 1.1% ahead of expectations. With soaring online sales offsetting disappointing high street sales, the company has raised its full-year profit guidance by 0.6%. The foreign currency seller Travelex was forced to take down its website, following a cyber-attack. The company has been working on the issue since the software virus attack struck on New Year's Eve, but its website still shows an error message at the time of writing this morning. Oil reached almost $70 a barrel after an airstrike ordered by president Trump killed a senior Iranian general in Iraq. Investors harbour intensifying fears of conflict in the world’s most important crude-producing region amidst unusually heavy trading volumes this morning.

Columns of note

Writing for the New Statesman, Stephen Bush reflects on Keir Starmer’s early poll lead amongst Labour party members in the contest for the next leader of the party. He reasons that it is still early days yet, however, and a particular point of interest is his suggestion that Jeremy Corbyn could yet break with convention and endorse a candidate. It’s from the Spectator’s Christmas issue, but it was only released online this Wednesday - Rory Stewart’s letter to the publication, asking how he can get president Trump to be rude about him to boost his mayoral campaign is a nice mood-lifter to start the day with.

Markets

What happened yesterday?

London stocks started the new year positively as investors welcomed monetary stimulus from the Chinese central bank, which helped to offset a more cautious stance being taken by some analysts on the back of concerning manufacturing data. The FTSE 100 finished the day up 0.82% at 7,604.30, with miners and financial stocks leading the charge, with gains compounded by a 0.9% drop in the value of the pound against the US dollar. There was a similarly positive story in the US, which was further boosted by the news from earlier this week that a first phase trade deal with China will be signed on 15 January. The Dow Jones Industrial Average closed up 1.16% at 28,868.80, the S&P 500 also finished up 0.84% to 3,257.85. The Nasdaq Composite was also in the green by 1.33% at 9,092.19.

What's happening today?

UK Economic Announcements (00:01) BRC Shop Price Index (07:00) Nationwide House Price Index (09:30) Consumer Credit (09:30) PMI Construction (09:30) Mortgage Approvals (09:30) M4 Money Supply Int. Economic Announcements (08:55) Unemployment Rate (GER) (09:00) M3 Money Supply (EU) (13:00) Consumer Price Index (GER) (15:00) Construction Spending (US) (15:00) ISM Prices Paid (US) (15:00) ISM Manufacturing (US) (16:00) Crude Oil Inventories (US) (20:30) Auto Sales (US)

Did you know?

According to the US Naval Observatory, the agency that maintains the country’s master clock, decades start in year one - not year zero.

Parliamentary highlights

House of Commons In recess until 7 January House of Lords In recess until 7 January Scottish Parliament In recess until 6 January