24 November 2017
The Bank of England turned uncharacteristically pro-Brexit – not to mention factual – in its appraisal of rapidly declining unemployment, which the Bank expects to apply much-need upward pressure on wages. A key reason behind the re-balancing of the British Labour market? reduced immigration of course. And while the commentariat sought to frighten everyone with subjective productivity data, Swiss banking giant UBS revised its forecasts upwards – and in case anyone failed to notice, the OBR’s downward UK growth visions were marginal. Car manufacturing is up and on track for a remarkable record by the end of the decade, exporters are bursting with optimism, while tourists are falling over one another to reach the UK.
The big boffins at the Bank of England have concluded that fading fears over Brexit combined with restored confidence first lost during the financial crisis and increasingly flexible work patterns are bringing Britain close to full employment, a knock-on effect of which will be rising wages.
Joblessness in the UK has dropped to 4.3%, the lowest in almost half a century.
Gertjan Vlieghe of the Bank’s monetary policy committee spoke before the Treasury Select Committee, citing an accelerated decrease in the number of part-timers seeking fulltime work and jobseekers indicating that Britain is reaching full real employment, putting pressure on firms to raise wages, and that’s even before you consider the benefits of a controlled immigration policy.
“I would also highlight the slowdown of inflows of foreign workers into the UK which may make pay growth here perhaps more sensitive to the tightening in domestic conditions than it has been previously,” said Michael Saunders, another member of the MPC.
At the end of a budget week when everyone and their dog suddenly qualified as an expert in productivity (an extremely inexact indicator) it is important to not lose sight of the fact that ours is a strong and strengthening economy. Step forward, Swiss banking Giant UBS, which upgraded its UK growth forecasts by 0.4%. At 1.1% however, it is still short of the Office for Budget Responsibility’s 1.4% and the Bank of England’s 1.6%.
Car exports rose 5% in October as demand for British-made cars soars following the pound’s historic devaluation at the referendum.
1.72 million cars were made in the UK last year, a 17-year high. 1.73m are expected to be built this year. The thriving sector remains on course to beat the record of 1.92 million vehicles by the end of the decade.
A fascinating survey of UK businesses by American Express reveals booming optimism among British business. Just under half (44%) are refusing to heed the warnings of doom mongers and say they expect revenues to increase next year as a result of better opportunities abroad. Half said they are looking to trade with new countries over the coming year.
With President Trump and his Commerce Secretary Wilbur Ross signalling their full intention to deepen trade with the UK, it is no surprise to see the US top the list of underexplored trading opportunities.
There was a time when the world was a march larger place and it made, at least some, sense to be locked into a regional trade bloc. Not any more though so it’s no surprise to see British businesses project their export strategies well beyond the North East Atlantic – a sensational 91% of respondents agreed that the emergence of new technologies would make international trade easier. No surprise then that 80% declared confidence in their international strategies.
Many businesses still said they would remain predominantly focused on selling into the EU, belying Establishment dogma that it will be impossible to sell into Europe in the event of a no deal.
£2.8bn, that how much lovers of all things great and British visited the UK spent in August, the highest splurge in a single month, ever. Europe, the US and increasingly, China dominate hoards of tourists coming over. And while the luxury goods available in smart London stores remain a huge attraction, the countryside is enjoying a well-deserved resurgence – Hotels in the Lake District experience double-digit rises in bookings in July.
“We are confident of a strong festive season and beyond as we showcase why our nations and regions should top people’s list as the must-go-now destination”, said VisitBritain director, Patricia Yates. What was that about Britain closing itself off from the world?
17 November 2017
This week Jacob Rees-Mogg hailed huge opportunities for Britain to benefit massively from a clean Brexit while industrial output soared, growth touched every part of the country, Michael Bloomberg admitted that London will continue its dominance post-Brexit, and revenues were shown to have risen for the UK’s biggest 350 firms.
Legendary Brexiteer Jacob Rees-Mogg has been leading the charge for free trade this week as he promoted a new report from the pro-Brexit Economists for Free Trade Group. The group estimates that the UK could benefit by billions every year with the introduction of an ambitious budget plan that allowed the UK to seize the big opportunities of independence from Brussels. Mogg attacked Chancellor Philip Hammond for his mad pessimism over Brexit, while calling for a budget that pursues free trade, reduces red tape, and cuts taxes. “The window of post-Brexit freedom will remain firmly shut to those forecasters who subscribe to the modelling approach adopted by HM Treasury, which has a neo-protectionist approach and an inbuilt bias towards a pessimistic assement of Brexit” said Mogg.
New ONS figures showed a surge in industrial output in the month of September, with production up 0.7% on August. Manufacturing output also rose by 0.7% in the same month, showing healthy economic performance across the sector. Machinery and equipment formed the bulk of the increase as the UK’s trade deficit narrowed faster than predicted by economic forecasters – a £0.7bn reduction, down to £2.75bn in September. The continued growth in output is impressive, with Samuel Tombs of Pantheon Macroeconomics reminding commentators that “industrial production has risen for six consecutive months, a feat last achieved 23 years ago”.
Signs of strong growth were confirmed by the Lloyds purchasing managers index survey of manufacturing and services. They showed growth in every corner of the country, and acceleration in all regions but three. Wales proved to be the biggest powerhouse region with a score of 58.6, where every figure over 50 represents growth. Growth in London hit a six-month high too, with a reading of 56.3 in October – up from 54.1 a month before. No wonder even top Remoaner Michael Bloomberg has done an embarrassing U-turn and admitted that London will remain the dominant financial player in Europe. “It has the things the finance industry needs: it is English speaking, it is family-friendly”. As we’ve been saying all along!
And a new study by Share Centre has showing stunning rises in revenues for the UK’s biggest companies. Revenues soared by 17.3% to £113.1bn over the last year, along with a 77.1% rise in operating profit. Much of the growth has been credited to the revaluation of sterling that followed our vote to leave the failing European Union – an event that made British goods more competitive on the global market.
10 November 2017
This week the UK’s global trade ambitions were given a boost as the American commerce secretary pointed ahead to a rapid deal between the UK and the world’s largest economy, as British trade with China boomed; new data from the Institute of Chartered Accountants in England and Wales showed British business flourishing; and starting salaries were shown to be on the rise while the Bank of England predicted a further surge for wages in 2018.
US commerce secretary Wilbur Ross made a stunning intervention into the trade debate this week as he slammed the EU for their “extreme protectionism” and reaffirmed the commitment of the United States to a strong trade relationship with an independent United Kingdom. The United States – a larger economy than the rest of the European Union – has been an ally of Brexit since the election of populist Donald Trump one year ago, and the latest remarks by a senior member of Mr Trump’s cabinet are an unambiguous reminder of whose side the world’s greatest superpower will be on during the struggle between London and Brussels.
Having bet Brexiteers Liam Fox and Boris Johnson, Ross confirmed that “there should be a free trade agreement between us once the UK is on its own. We’re huge trading partners with each other and our economies are in many ways more similar to each other than either of us is to most of Europe.”
And it isn’t only the US that continues to show a way forward for Britain in the global economy without the fetters of the European Union’s archaic trade policy. New figures show the UK surging as an important trade partner for China at the outset of the Asian century. £55bn in trade last year – a figure revealed by the CBI this week – places Britain as the eighth most important partner for China and the second most important in the EU behind only Germany. Strengthening commercial ties in the east – while the EU squabbles in a foolhardy effort to coordinate the trade policies of 27 different countries – will only benefit the UK.
New data from the Institute of Chartered Accountants in England and Wales blew yet another hole in the Project Fear narrative this week as profits and investment spending were shown to be on the rise in Brexit Britain. Both profits and exports are accelerating – now growing at their fastest pace in two years – while capital investments hit a two-year high. EY also had positive news with data showing that confidence was on the rise as 60% of surveyed firms plan to make acquisitions in the next year. “UK companies are facing an unprecedented breadth of challenge and change” said Steve Ivermee of EU. “Given these risks, the confidence shown by UK companies implies a strong belief in their ability to respond”.
As Stronger In head Stuart Rose admitted right at the start of the referendum campaign, Brexit is already delivering a wage boost for British workers. New data from the Recruitment and Employment Confederation’s monthly survey pointed to a hike in wages, with a less saturated labour market proving to be a serious boon for British workers. According to the REC data, starting salaries are increasing at their second-highest rate in two years as new employees are feeling the benefits of Brexit.
But the trend isn’t set to stop any time soon as even the pro-Remain Bank of England has admitted that next year will likely see further momentum for wage growth. Their recent summary of business conditions forecasts pay settlements up by 2.5-3.5% next year. The Bank’s data points to “a strong recovery in year-over-year growth in average weekly wages ahead” according to Samuel Tombs of Pantheon Macroeconomics.
3 November 2017
Manufacturing continued to surge in October as Mark Carney rose interest rates, the aerospace industry rebutted Remaoner scare stories, BMW reaffirmed its commitment to the UK, and Britain trounced European rivals as the most attractive destination for employers and staff.
A surge in both domestic and foreign demand has seen manufacturing growth in Britain accelerate according to the latest set of data from IHS Markit. Their monthly purchasing managers’ index records activity in private sector companies in the sector, and showed a reading of 56.3 in October – up from 56 in September – where any figure over 50 indicates expansion. Industry figures expect further growth, with more than half saying they believe output will grow even more in the next year. Rob Dobson, senior economist at the firm, said that “UK manufacturing made an impressive start to the final quarter of 2017 as increased inflows of new work encouraged firms to ramp up production” – but don’t expect wilfully blind Remoaners to herald the news of continued success for the sector, which has seen continuous growth in Markit’s data for 15 months.
The news saw a rise for sterling in the currency markets against both the dollar and the pound, but the work of the real economy was quickly undone by a gloomy tone from the Bank of England to accompany the announcement of a modest rates rise.
Remaoner scare stories about aerospace have been rubbished this week too as chief executive at the International Airlines Group, Willie Walsh, confirmed that BA would continue to fly after Brexit regardless of whether or not the UK strikes a deal with the EU. It offers authoritative rebuttal of numerous dishonest stories about flights being grounded after our departure from the block, which have even been peddled by senior members of the government including Chancellor Philip Hammond. Walsh said that “in terms of Brexit, there’ll be an outcome and we will continue to fly. Whatever it is, we will manage our business without any difficulty…”
Not only is BA hitting back against the Remoaner guff, but the aerospace sector in general is thriving in Brexit Britain with a huge third quarter that saw production saw to £7bn in commercial aircraft deliveries. Aerospace Defence Security – a major trade body – has suggested that the sector is on track to outpace performance in 2016, itself a record year for production. Chief exec Paul Everitt said that “this has been a strong three months for the global aerospace industry and for UK manufacturers. Following the annual record for deliveries set in 2016 there has been no slackening in the pace of production this year and we expect to see rates continuing to rise in the years ahead”.
BMW has become the latest major firm to reaffirm its commitment to Brexit Britain following similar pledges from car-making giants in the orient. Dr Ian Robertson, a director at BMW, said that “the fact that we sold 250,000 cars here last year means we have a strong desire to be part of that. The UK is the fourth largest market in the world for the premium cars. Is that going to change? I don’t think so”. Remainers often talk about the alleged importance of the European single market, ignoring the fact that the UK remains a powerhouse in the world economy. Britain currently builds a number of cars for BMW brands including the iconic Mini and Rolls Royce – a state of affairs that does not look likely to change.
A major survey from Colliers International has revealed the UK to be more attractive than any European rival for employers and staff, with London, Edinburgh, Manchester, Birmingham, Glasgow, and Bristol landing in their list of the top 20 cities. “In the face of negative reports surrounding the UK’s political, social, economic and country risk issues, our research demonstrates that the country as a whole remains in a particularly strong position” said Simon Ford, a director at Colliers. With London ranking first overall, it remains unlikely that the impotent threats of Remain-backing multinational banks to relocate jobs will ever come to pass.
The Bank of England returned the interest rate to its pre-referendum level of 0.5% Yesterday, the first rate-rise in ten years. Naturally, BoE Governor and Brexit blocker Mark Carney was quick to dismiss any notion that the decision was based on positive noises coming out of the economy, despite ever-increasing manufacturing performance and encouraging Balance of Payments data for 2016.
“Brexit will redefine the UK’s relationship with our largest trade and investment partner. And it will have consequences for the movement of goods, services, people and capital as well as the real incomes of U.K. households,” said Carney after attributing the barely significant rate rise to inflation – on the eve of the financial crisis, interest rates stood at 5.75%.
in August 2016, just over a month after the referendum victory, the Bank’s Monetary Policy Committee hastily decided to lower the rate from 0.5% to 0.25%. The return to the half a percent rate will have a direct effect on mortgage payments, but a modest one, an extra £15 per month on a £125,000 property according to Nationwide. Less than half of mortgages are tied to a variable interest rate anyway.
27 October 2017
This week GDP growth defied the predictions of economic experts as the UK continues to thrive as we head towards national independence, with wage growth on the horizon; the deputy governor of the Bank of England became the latest senior figure to mock Remainer suggestions that London will lose its status as dominant financial hub because of Brexit while anti-Brexit Bloomberg failed to walk the walk as it opened a huge new London HQ despite continuing to promote Project Fear; and two new surveys show consumer confidence back on the rise in the UK.
The UK economy grew by 0.4% in the three months to September, higher than the 0.3% growth experienced in both of the first quarters and higher than the rate of growth predicted by gloomy anti-Brexit economists. The acceleration in growth came on the back of a 0.4% boost to the services sector and a 1% surge in manufacturing. The figures are likely to prefigure a hike in in interest rates next month, with Ruth Gregory of Capital Economics saying that new stats “have probably sealed the deal on an interest rate hike next week” – a boon to sensible savers.
It comes as economists spy an end to the pay squeeze as delayed effects of a fall in the value of sterling begin to fade away. George Buckley of Nomura says that “UK earnings growth is finally showing signs of life” and he believes that inflation will fall to 2.5% – much closer to the target rate of inflation than we’ve achieved in recent years – while wages increase by 3% in the first quarter of next year. “The period of negative real wage growth looks to be both temporary and limited, at least when comparing it with the significant fall in real earnings between 2008 and 2014”. The lowest paid workers in the country are already enjoying inflation-beating rates of wage growth according to the Annual Survey of Hours and Earnings, which showed a 3.2% pay rise in the year to August for the poorest 10%.
Sir Jon Cunliffe, the deputy governor of the Bank of England, has become the latest senior figure to rebuke the mad theories of Remoaners that Brexit will somehow topple London from atop the global financial system and hand jobs to Frankfurt and Paris. Cunliffe, who is deputy governor for financial stability, shrugged off concerns and told the Western Mail that “I don’t see London as a financial centre being replicated on the continent anytime soon as it takes an awful lot of critical mass of expertise and knowledge”. It follows a cheeky Twitter intervention from Goldman Sachs SEO Lloyd Blankfein, who reported on a trip to Frankfurt and claimed he would “be spending a lot more time there”, helpfully hashtagging #Brexit. We’ll believe it when we see it. Anti-Brexit news agency Bloomberg demonstrated this week just how hard it is for Remoaner institutions to practice what they preach – they just opened a £1bn HQ in London while owner Michael Bloomberg calls Brexit “the single stupidest thing any country has ever done”. It’s easy to talk the talk, but it’s harder to actually walk away from a dominant centre like London.
The latest consumer confidence survey from Deloitte showed a three point rise in the most recent quarter with chief economist Ian Stewart claiming that “the rebound in consumer confidence testifies to the resilience of the UK consumer”. The survey showed growing optimism around job prospects and career progression, while discretionary spending jumped three points. The findings of the Deloitte survey were echoed by research from YouGov and the Centre for Economics and Business Research, which showed an increase in its October consumer confidence index from 108.7 in September to 109.3 – where any figure over 100 reveals a positive balance of confidence among consumers.
20 October 2017
Brexit talks got even thornier this week as Eurocrats attempted to suck an additional £6bn from the UK by attempting to overcharge us for pension liabilities, but Mrs May shouldn’t be too hasty in surrendering to the latest demand – after all, German businesses are looking ever more likely to break the trade deadlock by applying decisive pressure on their domestic government; meanwhile optimism is on the rise in the financial sectors as the proportion of finance chiefs fearing Brexit has fallen and the FCA has reiterated that independence will do little to hurt the industry, while fintech looks to enjoy a record year for investment; and the Australian government reaffirmed that it intends to do a quick trade deal with an independent UK, with suggestions that the arrangement could be settled in only 15 months.
In yet another reminder of why Britain was right to vote to leave the corrupt European Union, it now emerges that Eurocrats are attempting to rip off Britain to the tune of £6.2bn by trying to overcharge for our share of their pension liabilities. Critics of the demands point out that they are artificially high because they have been calculated using the current, paltry rate of return on investments of 0.3% per year rather than a longer-term average of 3.1%. The trick lets Eurocrats expand our obligations on the pension front from €3.5bn to €11bn.
Mrs May should be sure to resist such moves, especially since the EU position on trade seems to be cracking. Dr Bernd Atenstaedt, who chairs the group German Industry UK, has revealed that “we expect Mrs Merkel to calm matters down in Brussels and will be calling on her to speed up the process. Our businesses want clarity and a very good future relationship with the UK. It’s so important because we depend a lot on the UK.” Pressure from German industry will be significant on Chancellor Merkel, especially given her precarious domestic position following the AfD’s huge election breakthrough in recent weeks. With Donald Tusk revealing that EU leaders are now preparing internally for trade talks with the UK, it seems that the deadlock can be broken without craven surrender from our political elite.
A new Deloitte survey shows attitudes to Brexit softening among finance chiefs, with a new quarterly report showing the number of Brexit-sceptic chiefs falling to less than two-thirds of those surveyed, down from three-quarters prior. It comes despite increasing recognition of a potentially insoluble deadlock in Brexit negotiations, highlighting how the robust performance of the British economy since our vote to leave the EU and the delivery of Article 50 notice has defied so-called economic experts who predicted economic armageddon in the wake of a push for national independence.
The Financial Conduct Authority has also given Brexiteers a boost with an optimistic intervention in the debate about the future of financial services. FCA head Andrew Bailey pointed out that the UK already had “well established” methods of working across borders, adding that “this model works – it works for investors and for investment managers.” He asked if “it [requires] membership of the EU to make this system work?” and replying that “no, it does not.” He went on to attack a “failure of imagination” behind gloom-mongering predictions about Brexit damage, and said that “we are ready to roll our sleeves up and continue to make open markets work effectively.” That’s the spirit!
And British fintech firms are set to enjoy record investment this year, with new data showing the absence of any kind of Brexit penalty. $1.1bn has been invested in British fintech start-ups since the year began, a huge increase on rates of investment in the same period in 2016. London is a dominant leader, outpacing investment in any other European city significantly – drawing more than five times the money of any continental rival.
The Australian High Commissioner Alexander Downer has boasted that it took his country only 15 months to strike a major trade agreement with the United States, and predicts similar success in talks about a mutually beneficial trade arrangement with the UK. It comes following months of hollow talk from Brexit pessimists about the impossibility of rapidly forging deeper trade and investment relationships with global partners once we leave the dysfunctional European customs union and take back control of our own trade policy. “If free trade means free trade, it can be done very quickly” he said.
Downer went on to attack the EU as “preposterously protectionist” and slammed the Common Agricultural Policy as doing “far more harm than good” and pointed out that it “has been hugely damaging to global agriculture”. It is becoming clear that Eurosceptic critiques of the corrupt EU are catching the imagination of politicians worldwide.