2nd October 2019

Written by Scott Reid, Associate Partner

Edited by Kevin Pringle, Partner

Good morning,

The tactic of trying to move on from the cover-up of a government-sponsored killing to promoting plans for more tourism is desperate; but it may pay dividends. Today marks the one year anniversary of the disappearance, and likely date of the murder of journalist Jamal Khashoggi, as he entered the Saudi Arabian consulate in Istanbul. But the news being promoted by the Saudi government this week is the arrival of a new visa system for travellers to the kingdom that is hoped will  kick start an international tourism boom, with all the soft diplomatic kudos that will surely follow. As shameless as it is smooth, this pivot does not take away from what has been a bruising year for the reputation in the west of Crown Prince Mohammed. From being shunted to the back of the G20 Summit family photo last October to this June’s publication of a United Nations report that found “credible evidence” that he ultimately sanctioned Khashoggi’s murder, it seems Prince Mohammed can’t play by his own rules indefinitely. Domestic political pressure may have forced their hands sooner or later, but that governments in Germany, Denmark and Finland have ended their arms sales to Saudi in the last year is also significant. And yet, in many ways, it’s business as usual. Talks of floating Saudi Aramco with Asian financial backing have returned to the fore, the Gulf is preparing for its annual “Davos in the Desert” summit later this month, and the famous Dakar Rally will take place in January. A joint declaration of organisations led by Amnesty International and an op-edby Fred Ryan in The Washington Post, for whom Khashoggi was once a contributing columnist, strike a different chord. The key in all this, Ryan suggests, might be US leadership. If a Republican-controlled Senate can defy their president and stand up for its values by placing the blame squarely with Prince Mohammed as they did last December, events might yet move in a different direction.

News

Boris Johnson will announce a “final offer” to Brussels on a Brexit deal when he speaks to the Conservative Party conference later today. According to leaks of the proposal obtained by The Telegraph, a regulatory border would be erected between the UK and Northern Ireland, alongside customs checks between Northern Ireland and the Republic of Ireland, that would remain until 2025 when the Northern Ireland Assembly would be given a choice on whether to remain aligned to the EU. (£) The US State Department has requested an urgent briefing with senior congressional staff members after the Secretary of State Mike Pompeo tried to stall an impeachment inquiry against Donald Trump by suggesting that Democrats were trying to “bully” his office. The president tweeted last night that, “I am coming to the conclusion that what is taking place is not an impeachment, it is a COUP…” The Duchess of Sussex has begun formal legal proceedings against the Mail on Sunday over claims that the newspaper unlawfully published one of her private letters. In a statement announcing the High Court claim, the Duke of Sussex said that the couple were challenging “relentless propaganda”, which had also affected his mother.

Business & Economy

The World Trade Organization has more than halved its forecast for global growth during 2019, as it  warned that jobs and living standards could be impacted. The WTO said that it expected trade volumes to grow by 1.2%, down from a prediction of 2.6% in April, and that the global economy would grow by 2.3%, down from 2.6%. Sajid Javid has hinted that the government could cut inheritance tax after suggesting “it’s something on my mind” whilst at the Conservative Party conference. Speaking at a conference event organised by the Institute of Economic Affairs and the Taxpayers’ Alliance, the chancellor said it was “a real issue”, and that the Treasury had already made “sensible reforms”. Dave Lewis has announced his resignation as chief executive of Tesco, having led the supermarket group since 2014. In a statement as part of Tesco’s interim results this morning, Lewis said his decision was “personal one”. He will be succeeded by Ken Murphy, currently chief commercial officer at Walgreens Boots Alliance. Tesco reported a 6.7% rise in first-half profits to £494m. John Lewis Partnership has announced it will cut a third of its senior management positions as it merges its workforce with Waitrose. The restructuring is intended to save £100 million by shedding 75 of 225 current positions between the two companies. Rob Collins, who is currently managing director of Waitrose, is set to leave after 26 years of service with the grocery chain.

Markets

What happened yesterday?

The FTSE 100 made a lacklustre start to October after being dragged down by worrying US manufacturing data, which led the London index down 0.65% to close at 7360.32 points. The ISM Purchasing Managers’ Index recorded US manufacturing output during September at its lowest level in a decade, which analysts have attributed to Sino-American trade hostilities. Meanwhile, the pound was 0.1% higher on the dollar at $1.23, but off by 0.25% on the euro at €1.12 following an announcement by the prime minister that formal proposals for a Brexit deal would be unveiled today. In equity markets, Hargreaves Lansdown (down 3.51%) was the day’s worst performer after Credit Suisse downgraded its rating to ‘underperform’. At the other end of the scale was plumbing and heating products specialist Ferguson (up 4.07%), who gained as it reported annual profit growth of seven per cent.

Whats happening today?

Finals

Ceres Power

Interims

Inspiration Hlt Tesco

AGMs

Open Orphan

UK Economic Announcements

(00.01) BRC Shop Price Index (09.30) PMI Construction

International Economic Announcements

(12.00) MBA Mortgage Applications (US)

Columns of Note

David Remnick writes in The New Yorker that this week may have seen the flood gates of opposition finally open against the US president. The credibility of the whistle blower’s accusations make it all but impossible for Republican lawmakers to refute, and who now – with one eye on re-election in key Senate races next year – may be willing to dump the Trump. (£) In The Times, Daniel Finkelstein suggests that what Boris Johnson proposes to the EU is of little importance compared to how his message lands with votersahead of an anticipated general election. Pointing to historical precedent in Margaret Thatcher’s leadership during the Falklands War, Finkelstein argues that Johnson may be correctly gambling on posing as the strongman facing up to Brussels. (£)

Did you know?

The last McDonald’s in Iceland closed a decade ago. The final burger sold was kept - it’s still intact, and can be viewed in real time through Snotra House’s livestream.https://snotrahouse.com/last-mcdonalds/

Parliamentary highlights

Today

House of Commons

Oral questions

International Development (including Topical Questions) Prime Minister's Question Time Ten Minute Rule Motion Public Expenditure and Taxation (Advisory Body) - Jonathan Edwards Legislation

Domestic Abuse Bill: 2nd Reading Adjournment Welsh language - Glyn Davies House of Lords

Oral questions

Ensuring the UK’s development aid supports the most vulnerable minorities, particularly in Pakistan - Lord Harries of Pentregarth Procedures followed in the dismissal of Sonia Khan as a special adviser - Lord Young of Cookham Regulating the use of facial recognition technology - Lord Clement-Jones Safeguarding the supply of medicines and medical devices in the event of a no deal Brexit - Baroness Thornton Debate UK’s withdrawal from the EU - Lord Callanan Scottish Parliament Portfolio Questions Rural Economy; Transport, Infrastructure and Connectivity Scottish Labour Party Debate Give Them Time Campaign Don't Extend the ScotRail Franchise Members' Business debate Emma Harper: Scottish Women and Girls in Sport Week

TOMORROW House of Commons

Oral questions

Digital, Culture, Media and Sport (including Topical Questions)

Attorney General Motion

Debate on a Motion relating to women’s mental health General debate

General debate on the spending of the Ministry of Justice

Adjournment

Taxi and private hire licensing reform – Wes Streeting House of Lords Oral questions

The government's priorities and objectives in the areas they wish to diverge from European Union standards by way of UK regulations. - Lord Wallace of Saltaire Reducing inequality in the UK

- Lord McNicol of West Kilbride Effectiveness of procedures for acquiring British citizenship - Lord Dubs Steps taken in Parliament to enable the UK to leave the EU on 31 October and comply with the provisions of the European Union (Withdrawal) (No. 2) Act 2019. - Lord Cormack Debate Liaison Committee report: 'Review of Investigative and Scrutiny Committees: Towards a new thematic committee structure' - Lord McFall of Alcluith Reforming the management and treatment of offenders in prison and the community - Lord Ramsbotham Ensuring that human rights are respected in any future trade deals with other countries - Lord Harries of Pentregarth Scottish Parliament General Questions

First Minister’s Questions Members’ Business Great British Beach Clean – Maurice Corry Ministerial Statement Scotland’s Onshore Unconventional Oil and Gas Policy Portfolio Questions Stage 3 Proceedings Children (Equal Protection from Assault) (Scotland) Bill