16th October 2019

Written by Javier Maquiera, Associate

Edited by Harriet Moll, Creative Director

Good morning,

I first arrived in Barcelona in September 2012 filled with the excitement and anxiety of a 17-year-old moving away from home to start university. The first months in the city that I now consider my second home were truly eye-opening: I learnt a new language, met inspiring people, and engaged in political debates that liberated me from many of the prejudices I had back then. During the seven years I spent in Catalonia I witnessed with growing sadness and astonishment some of the key moments in its recent history, not least the failed independence referendum of October 2017 and the unfortunate events that followed. Two years on, nine high-profile Catalan politicians and activists who took part in that independence bid were sentenced on Monday to lengthy jail terms by Spain’s Supreme Court, which has sparked violent clashes between thousands of protesters and police in Barcelona. The former vice-president of Catalonia, Oriol Junqueras, received the longest sentence after being found guilty of sedition and misuse of public funds, while the two pro-independence activists that led the pacific demonstrations of October 2017 – Jordi Cruixart and Jordi Sànchez – have been sentenced to nine years of prison. In a move that barely differs from the behaviours of his predecessor, Spain’s caretaker prime minister, Pedro Sánchez, welcomed the Supreme Court’s ruling as bringing “an exemplary legal process to an end” and promised to uphold it, adding that “no one is above the law.” Now, don’t get me wrong: the idea of seeing Catalonia leave Spain certainly breaks my heart, and I concede that misusing public funds and unilaterally abolishing current law must come at a cost. But as a democrat, I can’t help but agree that any political problem deserves a political solution. Instead, the Catalan crisis has been approached with the disdain and fierceness of a state that simply fails to represent the sentiment of many Spaniards. The Supreme Court’s sentence closes another chapter of Spain’s constitutional crisis, and politicians have run out of excuses not to resolve this – if they still can.

News

The prime minister is reportedly on the brink of reaching a Brexit agreement with the European Union following major concessions to EU demands over the Irish border. Senior EU and British sources expect a draft text of the deal to be published today if No 10 gives the final green light after the negotiating teams agreed in principle that there will be a customs border down the Irish Sea. Foreign secretary Dominic Raab told the House of Commons that the UK will cease to grant new export licenses for weapons to Turkey, but will continue to sell arms to Ankara under “very careful and continual review.” The decision brings Britain into line with other European countries which plan to block future arms deals with Turkey. Dozens of civilians have been killed so far in the Turkish offensive that began last week and aims to push Kurdish-led forces from northern Syria. Hong Kong leader Carrie Lam has been forced to abandon her annual policy address as pro-democracy lawmakers repeatedly disrupted her speech saying she has “blood on her hands.” The address had been seen as an opportunity for Lam to put forward proposals to alleviate some of the perceived factors behind the unrest like inequality and limited access to public housing.

Business & Economy

The International Monetary Fund (IMF) has used its latest World Economic Outlook to warn that central banks around the world are wasting “limited ammunition” in trying to compensate for policy mistakes that have left the global economy at its weakest point since the global financial crisis. The IMF said it expected global growth to be three per cent in 2019, signalling that faster growth in 2020 would depend on a better performance by troubled emerging countries like Argentina and Turkey. Link Asset Services, the company managing the suspended Woodford Equity Income Fund, has announced that the fund will not be re-opened. Neil Woodford, who has been removed as manager of the fund, has criticised Link’s decision, adding that he doesn’t believe it is in the long-term interests of investors. The Office for National Statistics published data showing the UK unemployment rate unexpectedly ticked higher in August, with unemployed workers rising by 0.1% compared to the previous quarter. The employment rate stood at 75.9% – 0.2 points lower than the last quarter –, presenting a “markedly weaker jobs report” than expected, according to economists.

Markets

What happened yesterday?

London closed with mixed results yesterday, as the FTSE 100 was down 0.03% at 7,211.64 while the FTSE 250 index added 1.34% to 20,196.97 – its highest closing value in more than a year. The pound leaped higher on hopes of a Brexit deal, ending stronger both against the US dollar by 0.98% to $1.2728 and versus the euro by 0.91% at €1.1538. In corporate news, engineering group Vesuvius (-18.11%), engineer Renishaw (-6.85%), and pub group Marston’s (-7.38%) were all lower following disappointing updates. Safehavens like AstraZeneca (-1.35%), Diageo (-2.06%), and Reckitt Benckiser (-2.51%) were also in the red. On the upside, banks rallied amid Brexit deal hopes, with RBS (+5.07%), Lloyds (+5.24%), and Barclays (+4.09%) all higher. Across the pond, Sino-US trade relations remained in focus, while risk appetite was supported by strong earnings from companies in the banking, telecommunications, and consumer products sector, with the S&P finishing one per cent higher.

Whats happening today?

Finals

Applied Graph.

AGMs

Duke Royalty Loungers Plc

UK Economic Announcements

(09:30) Retail Sales

(09:30) Producer Price Index (09:30) Consumer Price Index

Int. Economic Announcements

(10:00) Balance of Trade (EU) (10:00) Consumer Price Index (EU) (13:00) MBA Mortgage Applications (US) (13:30) Retail Sales (US) (15:00) Business Inventories (US)

Columns of Note

Howard W French explains in The Guardian why China fears mounting a police or military intervention from the mainland to Hong Kong. French argues that the superpower risks crushing a critical business and investment portal for the country, as well as fuelling Taiwan’s motives not to accept unification with China on the basis of one country, two systems. He concludes that a Chinese crackdown in Hong Kong would also stain Xi Jinping’s aura of resolve and near infallibility at home, ultimately alienating the mainland’s growing middle class. Writing in The Independent, Tom Peck opines that the UK is now a competitor to the EU in a fight that Britain cannot hope to win. According to Peck, the EU27 will seek to punish and make an example out of Britons to avoid a British exit to incentivise other member states to follow the same path. He expects the trade talks to be brutal, not least because of the EU’s ruthlessness when it comes to protecting its interests and the inability of the House of Commons to reach agreed positions.

Did you know?

Bars in Italy are starting to use pasta as straws to reduce single-use plastic waste. A company called Stroodles already makes straws out of wheat and water that are 100% biodegradable and vegan.

Parliamentary highlights

Today

House of Commons Debate on the Address 3rd day of debate on the Queen's Speech Adjournment Future of Portishead railway - Dr Liam Fox House of Lords Debate on the Address Exiting the EU, trade, foreign affairs and defence - continued - Lord Ahmad of Wimbledon, Lord Callanan Scottish Parliament The Parliament is on recess until 27 October 2019. TOMORROW House of Commons Oral questions International Trade (including Topical Questions) Women and Equalities Debate on the Address 4th day of debate on the Queen's Speech Adjournment Economic case for the Eden North Project in Morecambe - David Morris House of Lords Debate on the Address Economic affairs, business, agriculture, environment, energy and transport - Baroness Vere of Norbiton, Lord Gardiner of Kimble Debate Motion pursuant to the Northern Ireland (Executive Formation ect) Act 2019 - Lord Duncan of Springbank