Thursday 1 November 2018
Even with the constraints posed by an inevitable Chequers-inspired arrangement with the EU, Britain’s economic partners across the oceans remain optimistic of expanded trade. At home, wages are up, as are mortgages to first-time buyers, while propaganda around Britain being the poor relation of the G7 is finally upended. On a similar note, after months of complaining about Brexit and threatening to leave London, Anglo-Dutch giant Unilever is staying.
According to the Office for National Statistics, wage growth in the three months to August of this year reached its highest level since the financial crisis. The findings provoked an immediate rise in the value of the pound, up 0.6 per cent to $1.3227.
The housing market is finally beginning to shift towards younger entrants and people on lower incomes with the number of loans issued in August to first time buyers climbing to its highest level since June 2017. In total, 35,500 first time mortgages were issues, a 2% rise on August of 2017, while the total value of loans jumped by more than 5% to £6.1bn. The average age of someone buying their first home has also dropped, down to 30.
Contrary to reports, the UK is not the low performer of the G7. UK Growth in 2017 was only a shade lower than in the previous year, 1.7% down from 1.8%, yet still higher than France, Italy and Japan’s. UK growth is likely to top out at 1.5% this year, higher than Italy. Growth reached 0.6% in the first 6 months of this year, compared to France’s 0.4%. Furthermore, Britain’s relative weakness needs to be observed in its proper context: the Eurozone is still getting high on stimulus under quantitative easing, Britain’s economy returned to normal working order long ago. QE on the continent will be phased out eventually, we’ll see who’s leading then.
See also, Ambrose Evans Pritchard’s must read myth buster from August: Brexit Britain has jumped towards the top of the G7 growth league
Sajid Javid, one of the frontrunners for the Tory leadership has called for the UK economy to take a dynamic approach in response to a possible no deal Brexit. In advance of the 2018 Autumn budget – which proved to be something of a bonanza – the home secretary envisages deeper tax cuts and other fiscal incentives, along with bigger infrastructure spending and opening up the economy to global talent.
Junior Senator for Oklahoma, James Lankford has recommended the United Kingdom as President Trump’s next major economic partner as the US ushers in a new “fairer” trade policy.
“We should be aggressively negotiating a deal with the UK to form a trading relationship,” urged Lankford in a statement. “There’s no reason the United States and the UK shouldn’t be the first major trade negotiation that they take on and that we solve.”
Turning his attention to Brexit, the Senator said, “this is a moment when the UK can walk away from Europe’s high tariffs and high barriers to trade and say let’s establish a closer relationship with our close ally with the UK.”
…dampening those aspirations somewhat is Australia’s former ambassador to the United Kingdom, Alexander Downer, who warned, “it wouldn’t be impossible to negotiate a free-trade agreement, but it would be a lesser agreement under Chequers.” Downer, a great advocate for a sovereign Brexit has routinely presented the net benefits of a comprehensive trade arrangement between the UK and Australia.
These concerns are even more deeply shared with the US’s current ambassador to the UK, Woody Johnson, who warned, “if Britain gets tied up with too many EU mechanisms, you have to look at what’s left.”
Nevertheless, Johnson is optimistic Britain going solo will be a success: “I’m very positive, no matter what form Brexit takes, that it will be good. I’d like to tell the British people to have confidence: have faith in your own abilities, your own culture, your own environment, your language and laws.”
Chantal Rickards, Bafta’s chief executive in Los Angeles, has fought back against the liberal luvvies saying, “Post-Brexit I think the world is going to be fine. The creatives will always find a way of working with each other.”
“Creative talent crosses borders, climbs walls and makes sure there is a collaborative entity at the heart of it, so I think that whatever happens with Brexit the creative industry will thrive.”
She added: “Whether it’s deal or no deal, they will find a way of working that works for everybody.” Indeed they will and always have.
Unilever will remain a London-listed company after shareholders rejected proposals for the food and detergents giant to retreat to the Netherlands after 133 years in the UK. CEO Paul Polman and several other board members dropped their plans after their extensive consultation revealed it was “appropriate to withdraw” them. Polman’s tenure at the helm now looks in jeopardy. The Anglo-Dutch company has made no secret of its hostility towards Brexit, the move was seen as a direct response to the vote of the 17.4 million. Once again, the top brass have been humbled.