9th October 2019

Written by Scott Reid, Associate Partner

Edited by Harriet Moll, Creative Director

Good morning,

Although never a group to be the darlings of the tabloid press, I’d say that kids have had a particularly tough time of late. Take Greta Thunberg. It is no accident that her critics take exception to her being – in their words – a “mentally-ill Swedish child” with all the accompanying accusations of not knowing any better and an inability to make her own mind up. It’s a sorry defense from the grown-ups who have so much to answer for, having failed to act on many of the planet’s ills that earlier generations unwittingly or now wittingly, contributed to causing in the first place. As Leslie Hook wrote in the Financial Times yesterday, if a young person is indeed humanity’s best hope - and one tipped to win this year’s Nobel Peace Prize - then the rest of us should be sitting up to ask why. It was the question my colleague and I faced yesterday as we spoke to a local primary seven class about another of our planetary ills – fake news. It was humbling. Despite making our careers in media and thinking ourselves on top of the current digital agenda (though on that note I can recommend Ian Hyslop’s masterly BBC documentary that aired on Monday night), we found that we were the novices. We chatted with students born into a post-2007 world where a lifetime spent in front of one newsfeed or another has lent them an oar as the rest of stare up the proverbial creek. They couldn’t quite articulate why, but they instinctively ‘got’ why the opinions of a faceless egg on Twitter can’t be trusted when compared with the reporter who makes their living by trading in fact; it’s common sense. Their nativism in a world we see as changed is a powerful weapon indeed. The truth is, young people are already changing the world. The Royal Shakespeare Company’s decision to ditch a sponsorship deal with BP last week, citing the alienation of young theatregoers, demonstrates the purchasing power they already possess. And today’s column of note by John Gapper shows the influence they may yet exert on the next generation of oil giant chief execs.

News

Boris Johnson and Leo Varadkar are expected to meet tomorrow after reports yesterday that Brexit talks were on the point of collapse. Speaking to Irish broadcaster RTE, Irish taoiseach Varadkar said that “big gaps” remained in discussions, meaning that an agreement would be “very difficult” to achieve before October 31. Elsewhere, a No 10 source said yesterday that a phone call between Johnson and German chancellor Angela Merkel earlier in the day had been a “clarifying moment”, which suggested a deal was “essentially impossible, not just now but ever”. The source claimed Germany had refused to relinquish a Dublin veto over Northern Ireland’s continuing role in the customs union and single market and that the region must remain fully aligned with the bloc “forever”. (£) The White House has officially refused to co-operate with the impeachment inquiry lodged against Donald Trump by three Democratic-led congressional committees. The eight-page letter addressed to the House speaker Nancy Pelosi rejected the inquiry as “baseless” and “constitutionally invalid” by not having held a precursory vote to launch investigations. Meanwhile, the White House has also blocked the US ambassador to the EU from giving testimony to the inquiry, to which Democrats are expected to issue a subpoena in response. A Norwich council estate of low-rise brick terraces has won this year’s Stirling Prize for the best UK architecture. The award, which was the first to be awarded to social housing, is seen as marking a shift in focus from last year’s winner, the City’s £1 billion Bloomberg Building, and was noted by the judges for its potential to be scaled for future UK public housing investment.

Business & Economy

The new managing director of the International Monetary Fund has warned that Brexit will be “painful” in whatever form it takes. Speaking to the BBC ahead of the IMF’s annual meeting in Washington DC next week, Kristalina Georgieva also suggested that the options available to the UK, EU and third countries impacted by ongoing Sino-US trade hostilities would be “limited”. The IMF will begin investigating the impact of negative interest rates in an anticipated “synchronised slowdown” in the global economy. The US Federal Reserve will resume the purchase of short-term US Treasury bonds in a bid to avoid repeat disruption to overnight “repo” markets. Speaking in Denver yesterday evening, chair Jay Powell said the action differed from quantitative easing as it was designed to facilitate short-term lending rather than stimulate the US economy. UK productivity is falling at its fastest pace in five years, the Office for National Statistics has said. Output per hour fell by 0.5% between April and June following two quarters of zero growth, with contraction evidenced in both services and manufacturing.

Markets

What happened yesterday?

Faltering optimism that a deal between the EU and UK on Brexit, and also between the US and China on trade, can be agreed in the near future put a dent in the London market yesterday. This led the FTSE 100 down 0.76% at 7,143.15 points, with sterling also finishing lower by 0.66% against the US dollar at $1.22 and by 0.53% on the euro at €1.11. A weaker pound, however, lifted the FTSE slightly higher than it would have otherwise finished in response to the day’s main market-moving news, which was speculation that China will retaliate today in response to recent US tariff impositions on eight Chinese tech companies. In equity markets, shares in the London Stock Exchange Group (down 5.80%) slumped after its Hong Kong-peer, Hong Kong Exchanges and Clearing abandoned its £32 billion takeover bid following a breakdown in management discussions over recent weeks. And joining it among the day’s worst losses on the FTSE 250 was EasyJet (down 7.55%), whose stock increased after the airline suggested annual profits would be on the higher end of guidance.

Whats happening today?

Finals

Volution Group PLS

Interims

Vertu Motors

AGMs

Fastfwd Innov Fulcrum Utility

Trading Announcements

Robert Walters

Intl. Economic Announcements

(12.00) MBA Mortgage Applications (US) (15.00) Wholesales Inventories (US) (15.30) Crude Oil Inventories (US)

Columns of Note

Following the appointment of a blue sky thinker like Bernard Looney as the new chief executive of BP, FT columnist John Gapper spies an opportunity for big oil to start taking the climate protests seriously. Gapper suggests the likes of BP, Shell and Total could begin reporting the consumption and emissions of their customers, rather than just their own operations, and evolve from being oil companies to ‘energy groups’ with more diversified commodity portfolios. (£) Daniel Finkelstein writes in The Times that America cannot be depended upon as a post-Brexit haven for the UK’s trading ambitions. Finkelstein writes that Leavers have fundamentally misjudged America geopolitical priorities when assessing Brexit – principally, that even the most ostensibly anglophile of US administrations will pursue self-interest first when the international waters are choppy, as they are now. (£)

Did you know?

Before the invention of penicillin in 1928, syphilis was briefly prescribed to cure malaria. Julius Wagner-Jauregg won the Nobel Prize in 1927 for this discovery.

Parliamentary highlights

Today

House of Commons The House is in prorogation and will next sit on Monday 14 October 2019. House of Lords The House is in prorogation and will next sit on Monday 14 October 2019. Scottish Parliament Portfolio Questions Stage 3 Amendments Transport (Scotland) Bill Members' Business Charter of Rights for People with Dementia and their Carers 10th Anniversary – Sandra White TOMORROW Scottish Parliament

General Questions First Minister’s Questions

Members’ Business World Day Against the Death Penalty – Bill Kidd Portfolio Questions Stage 3 Debate Transport (Scotland) Bill Stage 1 Debate Non-Domestic Rates (Scotland) Bill