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Saturday 31st October 2020
Hi Friend,
When The Seagulls Follow The Trawler ...
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| Business Will Be Thrown Into The Sea ...
Just a few weeks to go to the end of the year, "Time is running out", the message from government. Businesses are not yet prepared for the new trade deal with the EU. No surprise really, great uncertainty still remains about the shape of the deal, let alone, the detail within.
Companies are scrambling to get ready ahead of the deadline on January 1st, without any clear idea of the basis on which they will trade, with European partners.
"They won't give us a deal like Canada" bemoans the Prime Minister. Hardly surprising, the nearest Canadian fishing grounds are in British Columbia. That's a haul too far, even for the itinerant fisherman of France and Spain. The industry remains a fish bone of contention, despite the marginal contribution to UK GDP.
"We must prepare for an "Australia-style" deal the latest message. That's a "no-deal" deal in reality speak. Companies are urged to step up arrangements for an Australia-style arrangement. No thought of just in time manufacturing, rules of origin, regulatory standards, agricultural policy, the Irish border. The government Brexit advice service, is unable to give advice, because they do not know as yet, the advice to give.
"There is a lack of urgency on the part of too many traders". Lord Agnew of Oulton told the Treasury select committee this week. The Minister charged with Brexit preparedness, insisted he was not seeking to apportion blame, just pointing out an obvious case of indolence and sloth, on the part of some British traders.
"Business is running out of patience, with Brexit lectures from Number Ten", the headlines in the Times today. Dame Carolyn Fairbairn head of the CBI, called for "national unity" between business and government, ideally before she leaves office next week.
A meeting with the Prime Minister and business leaders this month was described as "terrible, disappointing and more of a lecture than an exchange of views. "They just don't get it" said one. "They just don't have a clue" claimed another. Johnson stayed for a few moments before handing over to Michael Gove.
Gove continued to trot out the same old trope. "We will go out into the world as a confident, independent, free trading, freedom embracing state." Yes and we get to eat our own fish too!
The Director General of the CBI said this week, "this is a time to bury the hatchet" ... where exactly was not made clear ... but time is running out ...
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| House Price Growth Reaches Five Year High ...
House price growth reached a five year high in October. Prices increased by 5.8% in October, according to the latest data from Nationwide.
Prices increased by 7.5% last month according to the latest data from the Halifax building society.
Mortgage approvals increased to 91,500 in September, the highest level since 2007. The stamp duty holiday is providing a positive boost to activity.
Behavioural shifts are impacting on the market according to the data from a Nationwide survey. 10% were in the process of moving as a result of the pandemic. A further 20% were considering a move for the same reason.
35% were considering enhancing their home, almost half wanted to add or maximise space. Retail sales figures demonstrate the growth in DIY and home improvement. DIY sales increased by almost 30%, year on year last month.
Robert Gardner, Nationwide's Chief Economist warns, "The outlook remains highly uncertain. Activity is likely to slow in the coming quarters". Unemployment is expected to rise, as the furlough scheme ends this month. Earnings will be under pressure, the house price to earnings ratio ticks higher. The stamp duty holiday expires at the end of March.
Martin Beck, at Oxford Economics, said:
“The property market is unusually insulated from the economy’s troubles,
in comparison with past recessions. Those hardest hit by job losses and
cuts to income appear to be the young and low-paid, who typically are
not homeowners nor home buyers.” The tide in activity may be set to turn ... but not just yet ...
Lest we forget! The US election is just days away. This could mean the end of our West Wing WTF series if the Biden-Harris ticket gets over the line ...
That's all for this week! Have a great, safe, week-end ... Hands, Face and Space ...
John
Don't forget you can now listen the The Saturday Economist Live as a weekly Podcast. The TSEL monthly review will be available on our media channel over the weekend.
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