Friday 9 March
The Chancellor has been delivered bumper UK output, trade and confidence figures to buttress next week’s Spring statement. Remainer warnings of economic catastrophe grow ever more ridiculous. When will they accept defeat? Siemens for one are making a mockery of their own Brexit warnings, with hi-tech investment in the UK, while those project fear economists have been called out by a comprehensive study by the Cambridge Centre for Business Research. And the Saudis were in town this week to tie up £65bn in deals.
German engineering giant Siemens will create 1,700 new jobs in Goole, Yorkshire with a £200m investment in a new hi-tech train factory. The decision to invest marks a dramatic u-turn: during the referendum, Siemens had warned against the “significant and negative long-term effects” of leaving the EU.
Figures are improving across the board as UK energy imports have been driven down by the re-opening of the Forties oil pipeline in the North Sea. Industrial output jumped 1.5% last month with manufacturers’ organisation EEF revising their forecasts for the year to 2%, up from 1.4%. EEF also recorded a whopping 21% increase in orders since last year. Confidence has increased by 5.9%. The Chancellor has yet more good news in the run-up to his Spring budget statement next week. The increase in supply of domestic oil has dramatically rebalanced UK trade, reducing the deficit to £3.15bn from £4.9bn in December.
…and the Confederation of British Industries – who like the Siemens, are consuming large amounts of project fear humble pie – have revealed a double increase in business output their monthly growth indicator, a staggering 20% increase compared to February’s already impressive 9% rise. Other than retail, growth across all sectors was far ahead of the average, the CBI said. The stellar figures, particularly for manufacturing, are due to a healthy global economy, and you guessed it, a lower valued pound, something Brexiteers can all take credit for.
On the subject of a devalued pound, a groundbreaking study by the Cambridge Centre for Business Research has torn to pieces all the major economic ‘forecasts’ used to pummel the public into submission during the referendum and its aftermath. The most cited failing of bent economists at the Treasury and elsewhere? The complete failure to consider the massive benefits of a devalued pound. Researchers Coutts, Gudgin and Buchanan also criticized economists for assuming membership of the protectionist bloc provides the UK economy with a net positive advantage, when the evidence says differently. The impact of business uncertainty was routinely overestimated, the project fear forecasts also chose to compare Britain with smaller, less developed economies, which when added to a trade alliance tend to perform much better because they are coming from a very low base. Lest we forget, the UK, with significant mentions to the Netherlands, Hong Kong and Singapore, is historically the most highly adapted trading nation in the world.
Saudi Arabia’s reformist Crown Prince Mohammed bin Salman was in London this week to tie up 14 trade deals with the United Kingdom, amounting to a staggering, £65bn in mutual investment. With typical understatement, Theresa May described the deals as a “vote of confidence” in the UK economy. The spending will be heavily weighted in Britain’s favour. The Saudi kingdom is the world’s largest importer of defence equipment, the UK is its second-biggest supplier. And with the Saudis set to sell shares in Aramco Petroleum, the world’s most valuable company, the London Stock Exchange is at front of the queue to win the contract.
Friday 23 February
This week saw an increase in employment, reflecting the UK economy’s increasing strength. The deficit is declining by a whopping £5bn. With fears the referendum result has negatively affected British prosperity eliminated, a group of economists have estimated Brexit will pay out a dividend of between 2 and 4 percent. And while the news on this side of the Channel becomes ever more positive, it is revealed Paris has officially failed to lure business from Britain and the rest of Europe has given up on divvying up London’s mighty clearing infrastructure between other lesser hubs across the continent.
Bloomberg – Airbus CEO Vows to Stay in Post-Brexit U.K. Long Into FutureA leaked letter from Airbus CEO Tom Enders to Business Secretary Greg Clarke reveals the aerospace giant’s commitment to remaining in the UK, “long into the future.’’ Airbus’s Bristol plant manufactures the wings to its famous giant jumbo, the A380. Contrary to popular perception, EU import tariffs on aircraft components are low, 0-2.7%. The US, the world’s largest aviation market, charges 27.5% but still imports aircraft parts in high volumes. Airbus’s longstanding presence in the UK was never in doubt.
Britain’s budget deficit has fallen to £40bn from £45bn a year ago thanks to a spike in productivity and continued high unemployment (see below). A cheeky trick pulled by George Osborne to get recipients of dividend payments to declare more income at the beginning of 2017 and less at the beginning of this year has failed to make a dent into tax revenues. Similarly, the Office for Budget Responsibility is guilty of underestimating the vigour of the British Economy. At the time of the budget in November, it had warned the chancellor of woeful British productivity. It will now have to revise all its forecasts, including a downward correction in British borrowing to the tune of £7.5bn.
UK employment rose by 88,000, up to 32.15 million in the second half of 2017.
A group of economists have salvaged what they could of Whitehall’s dodgy, and still unpublished, Brexit forecasts and have found the underlying assumptions to be deeply skewed. Applying the government’s preferred GTAP methodology for economic estimates to the economic partnership outlined by Theresa May at her Lancaster House speech, Economists for Free Trade expect Brexit to lead to a 2-4% increase in economic output, as opposed to a 2-8% decline.
A survey by FTI Consulting has found that 53% UK companies believe Brexit will boost British prosperity – two-thirds of owners and managers expressed their personal preference for leaving the protectionist bloc. The findings point to a division between small businesses, which account for the majority and multinational corporations, which have developed cosy ties with the Brussels regulatory machine that makes life disproportionately difficult for the smaller players. The findings offer a fascinating glimpse into the more competitive and dynamic economy awaiting independence.
Paris’s concerted efforts to attracted business from London, which date back to before the referendum, are failing. According to figures compiled by property giant JLL, businesses are leasing less office space in the French capital. Commercial leases dipped from 188,000 square metres in 2016 to 127,000 squared metres the following year. London is ranked top in Europe, doubling Paris’s meagre showing: 254,000 square metres…
…The JLL figures come amidst the realisation in Brussels and across the EU’s financial hubs that there is not the capacity to transfer large portions of financial services from London to the likes of Dublin, Luxembourg, Frankfurt and Paris. Europe’s businesses rely on London to countersign most of their transactions and list their shares, and have not taken their business elsewhere since the referendum. As a consequence, smaller competitors abroad have not had the incentive to expand capacity. Even Brussels hasn’t raised a finger, not bothering to pile up extra regulations to deal with the added risk that would result from a mass exodus of financial services from the City, simply because this will not happen.
Friday 16 February
This week a new set of services data showed the UK enjoying yet another post-Brexit economic boost, defying the doom-mongering predictions on Remainer pundits while Citigroup and Sumitomo Mitsui announced further commitment to Brexit Britain. Meanwhile the CEO of BP Bob Dudley quashed pessimistic claims about Brexit while Australia’s High Commissioner revelled in the possibility of a future trade pact with the UK while warning Brits that we have nothing to fear from competition – of course not, just this week our food and drink exports were shown to have hit a record value of £22bn!
Another week passes, another encouraging bundle of services data flows in. Further to last week’s story about Britain economic growth gaining a boost from the uplift in the US and the Eurozone the Bank of England, together with the CBI, has discovered that the British economy will benefit even more than originally expected thanks to the dominance of British services. Accountancy firm BDO notice an increase in output in January from December. On its present course, the British economy is set to grow 2% in 2018. The current forecast is 1.9%. And it’s not just services – according to the Bank of England, manufacturing continues to enjoy its current “sweet spot” thanks to the pound’s lower value too.
BP CEO, Bob Dudley has sought to assure Britons buffeted by endless pessimism that the nation’s economy remains on a strong footing. “There are a lot of countries around the world that would like trade deals with Britain bilaterally down the road, I hear that a lot,” Mr Dudley said in an interview with The Times. “I don’t think British influence is diminished. BP works all over the world and I see the importance of Britain in what we do and how they view BP”, said Mr Dudley, an American, adding that the consequences of Brexit for BP would be “very minor”. Trust Yankee businessmen to cut though the noise and say it as it is.
Global megabank Citigroup is setting up an innovation centre in the disaster zone known as the City of London – according to the Remain media that is. “Citi continues to invest in London, a key hub for both cutting edge technological talent and some of our largest investor clients,” said Citi’s EMEA CEO, Jim Cowles. The centre will take charge of Citi’s R&D for the whole of Europe, Africa and the Middle East. American Banks have fuelled speculation of mass relocation of thousands of staff. Citigroup however are only expect to move 250 employees to Frankfurt out of 6000. Actions speak louder than words.
But it isn’t just Citigroup. Yet another Japanese bank is expanding its operation in the City of London too. Sumitomo Mitsui is setting up in a swanky new 520,000 square foot development just off Liverpool Street, in the heart of the City. The plans for new office space were announced by developer British Land at the end of 2016. Office in rentals hit a twelve-year peak in November of last year.
Demand for British products is at an all-time high as the rest of the world’s insatiable appetite for British whisky, salmon and cheese shows no signs of abating. Treasury figures reveal 13.2 tonnes of food alone was shipped abroad in 2017, a £2bn increase on the previous year. Scotch whisky exports grew an astonishing 9%, up to £4.36bn – the equivalent of 1.3m bottles a day (484 million bottles overall). “Contrary to the constant negativity of the doom-mongers, the British economy is going from strength to strength, showing a Green Brexit can deliver for the whole country,” said agriculture and environment secretary Michael Gove.
Celebrity diplomat and friend of Brexit Alexander Downer, Australia’s High Commissioner in London, has yet again weighed in with encouragement noises about British prospects outside of the failing bloc. In a must-read article in the Sun, Downer explains how Australia’s decision to run a unilateral bases trade agenda and open the national economy up to foreign competition paid dividends:
“Let me say that Britain has nothing to fear from trade and competition.
“We in Australia have been through it…In the Eighties, Australia was an economy in all kinds of trouble. We had tried to develop new industries such as building our own cars and we had put up barriers and tariffs thinking they would protect our new businesses.
“…We realised we should not be protecting our industries — we needed to open them up to the world. This forced our economy to modernise to keep up with the changing world and new technology.
“…British manufacturing relies on overseas inputs — when these are cheaper, British manufacturers are more competitive — and so more people across the world will buy British.”
As part of Downer’s lobbying campaign against Britain staying in the EU’s oppressive customs union, he visited the BBC Radio 4 studo. “We [Australia] could build substantially more trade if we were able to negotiate a free trade agreement with the UK,” he told listeners. It’s time for the government to heed Downer’s advice and hit out on the world stage!
Friday 9 February
UK growth estimates are upgraded yet again, not by one, but two organisations, the Bank of England and the National Institute for Economic Research. That cause for optimism was boosted by a revision of UK wage growth data, which is now ahead of inflation. Exports in services are up. Investment floods in from China and into the UK’s burgeoning tech sector from all over the globe and New Zealand states its intention to get a trade with the UK underway.
Britain may be on the opposite end of the economic cycle currently topping out in United States and Europe, but that does not mean it cannot enjoy some of the spoils. According to the National Institute for Economic and Social Research (NIESR) UK GDP should grow by 1.9% in 2018, and sustain throughout 2019. Growth in 2018 was originally estimated to be 1.7%. NIESR attributed the revision to the Eurozone’s modest bounce back and Trump’s America. In keeping with the dark art of economic forecasts, the Bank of England also upgraded its estimates for 2017 from 1.6% to 1.8%. 2018 and 2019 were also upgraded to 1.9% from 1.7% – see Times: Interest rates to faster than expected, says Bank of England
Wages roses 3.1% in the year to September, a whopping 0.8% higher than previously estimated. The discrepancy in estimates is due to experimental data provided by HMRC. Rather than compiling thousands of employee surveys, the new system uses real-time pay as you earn (PAYE) data. In the war between Remainers and Leavers, Remainers are desperate to prove wages are increasing below the inflation rate. This more accurate data points to the contrary. The Bank of England this week, released fresh inflation data for December, 3% and falling.
Britain’s mighty exports in financial services made a dramatic surge in 2016, jumping 15.8% from £82.6bn to £95.7bn, cementing its status as the top services exporter in the world.
“While London is an important piece of the puzzle, over half the industry’s exports come from other parts of the country,’ said Anjalika Bardalai, chief economist at TheCityUK. Financial services unsurprisingly accounted for the majority of exports.
“In 2016, industry exports saw double-digit growth in nearly every part of the UK. It’s this collective national contribution which helps to make the UK the world’s leading international financial centre.”
Britain’s booming finance technology market is now the second largest in the world, with only the United States to beat. Half of the cash invested is coming from overseas, helping to fuel an astonishing 150% expansion in 2017. More than £1.3bn was invested in a wide range of start-ups looking to revolutionise Britain’s dominant financial services sector.
Chinese mega-telecoms and technology company Huawei is ploughing more investment into booming Brexit Britain. The world’s largest telecoms equipment manufacturer is committing an extra £3bn into a range of UK-based business ventures. The deal was wound up during Theresa May’s trade mission to China last week, where £9.3bn was made in investment and sales contracts.
Mail – New Zealand’s Prime Minister says the country is ‘here, ready and willing’ to do a post Brexit trade deal with the UK
Kiwi prime minister, Jacinda Ardern says she has spoken to Theresa May “many times” about a lucrative trade deal with New Zealand. “We know that the priority from the UK’s perspective is of course the Brexit negotiations themselves,” she told BBC Radio 4.
‘But beyond that we are here, ready and waiting and really willing to model what those future trading agreements from the UK’s perspective could look like.
‘So when you are ready we are.’ We certainly are.
1 February 2018
Booming consumer confidence has snapped the British economy out of winter sorrow as a survey by Lloyds finds optimism at a nine-month high. Bucking another trend for this time of year is Brexiteer publican Tim Martin, founder of JD Wetherspoons where it has been far from a dry January. British services exports are up a staggering 15.8%, International Trade Secretary Liam Fox reveals Britain is the place to be for international tech while the CEO of one of Britain’s biggest housebuilders eats humble pie over his Brexit doom predictions.
A boost in economic optimism over the Christmas break has led to a nine-month high in consumer and business confidence. A 1,200-strong survey by Lloyds was interpreted as a yet another sign of the UK economy’s continued resilience. “The sharp increase in economic optimism signals that downside risks have eased and the economy is likely to continue to expand in first quarter this year,” said Hann-Ju Ho, a senior economist for Lloyds Bank Commercial Banking.
The UK’s services exports to the EU grew by a staggering 21% in 2016, jumping to £18.4bn from £14.9bn, putting yet more pressure on the EU to sign a comprehensive trade deal encompassing both goods and services. British services imports from the EU also rose, but by only £5bn. More telling however, is the surge in British services exports worldwide, up £20bn to £142bn, a reminder of how much bigger the world beyond Europe really is. No wonder Liam Fox urged everyone to put EU trade in perspective during his trip to china this week. “We’ve got to get away from our obsession with Europe in terms of its relation to the global economy – according to the IMF, in fact according to the European Commission, 90 percent of global growth in the next ten to fifteen years will be outside the European continent,” he said.
Total revenues at JD Wetherspoons grew 4.3% in the 12 weeks running up to January 21st. The company, founded by impassioned Brexiteer Tim Martin, enjoyed higher than expected pre-tax profits for the year to date. In response to the CBI’s claim that Brexit would bring about a rise in food prices, Mr Martin said: “Provided that parliament takes sensible steps, such as the elimination of food taxes, the public will benefit from lower food prices, from regained fishing rights and from savings of about £200m per week of EU contributions.”
At a business gathering in London, International Trade Secretary Liam Fox revealed the tech sector Down Under prefers the UK because it is home to “the best intellectual property protection, the gold standard in the world”. The source of this insight? the Australian government no less.
The CEO of FTSE 250 housebuilding firm, Crest Nicholson has admitted he was wrong to fear an economic downturn following the nation’s patriotic vote to leave the EU. Stephen Stone explained how under his orders, Crest Nicholson had held back on spending in 2016. “But it’s fair to say I got that wrong, and a lot of other people now accept they’ve got that wrong,” he told Radio 5 Live. Crest Nicholson reported increased sales and profits this year due to good mortgage access and buoyant employment. “I expect the new-build housing market to remain robust,” added Mr Stone.
19 January 2018
Spain and Luxembourg joined Italy this week in their calls for a comprehensive trade agreement with the departing United Kingdom while economic forecasters warned that Europe could take a huge hit if German and French stubbornness prevails; midsized business gave a vote of confidence to global Britain with a plurality favouring a clean break from the EU; and sterling enjoyed a sustained rise in the currency markets, against the predictions of Goldman Sachs.
Prospects of a generous Brexit deal have increased this week as more EU countries begin to stand up to Germany and France and oppose their plot for a punitive resolution. Spain is among the latest to come out in favour of a good deal, with Madrid calling for a minimum tariffs agreement following a meeting with the Dutch. Spain has previously been a prickly partner due to disputes over the governance of Gibraltar, but economy minister Luis de Guindos called for a Brexit deal “that keeps Britain as close to the EU as possible”. It follows a similar intervention from Italy last week, with that administration demanding a so-called “Canada Plus Plus Plus” deal for Britain.
Luxembourg joined the chorus too, calling for a deal that keeps markets in both goods and services as open as possible. Xavier Battel, the prime minister of Luxembourg, said that “most would be happy to stick as close as possible to the current status quo”.
It’s no surprise that European nations are waking up to the importance of maintaining close economic ties to Britain. New research from Professor Patrick Minford suggests that Britain could benefit massively from a no-deal scenario – profiting by £640bn according to his estimates – while the European Union could lose half a trillion pounds. The Cardiff University professor said that “it could not be more open and shut who least wants a breakdown”.
He is not alone in his gloomy predictions for the European mainland should German and French stubbornness win out. Oxford Economics this week agreed that a hard Brexit would hit Europe with a crippling economic blow, but put their estimate at a £100bn cost.
And a trade deal is the preferred route out of the EU for a plurality of midsized companies in Britain too, with a new poll revealing that 22% of those surveyed want a Canada style arrangement while a further 19 back reverting to WTO rules. 6% more preferred another option – perhaps the enhanced “Canada Plus Plus Plus” deal that increasingly appears to be on the table. Less than a quarter of those polled wanted to remain in the single market and only 6% wanted to stay in the customs union. Yet more evidence that ordinary businesspeople in Britain believe in a prosperous future outside of the European Union.
Meanwhile sterling has rallied this week, hitting a post-referendum high of $1.37 against the dollar at the weekend, continuing upwards to $1.39 throughout the week. It comes after a long period of sustained expansion in manufacturing owing to the increased competitiveness of British produce on the global markets – due in part to the devaluation of sterling following the 2016 referendum. But sterling is on the way back up; having delivered benefits to the economy, it is now appreciating and disrupting possible inflationary consequences. This is in contrast to the forecasts of Goldman Sachs – who recently suffered their first quarterly loss in seven years – which has predicted sterling would fall even further to $1.14 by the end of 2017.
12 January 2018
UK manufacturing boomed in December with the sector expanding at its fastest rate in a decade and enjoying its longest period of growth in 20 years – the figures promoted the NIESR to boost its 2017 growth forecasts to 1.8%; 36 countries have agreed to sign free trade deals with the UK on Brexit Day in 2019; and EU politicians start waking up to their need for a comprehensive trade deal with the UK as a new report from Deloitte warns that the German car industry would be crippled by a hard Brexit.
For the first time in 20 years British manufacturing has enjoyed a seventh consecutive month of growth, expanding at its fastest rate for a decade. The new figures from the Office for National Statistics reveals a 0.4% expansion in output and an estimated 3.9% year-on-year increase in the three months to November. The figures defy the pessimistic guesswork peddled by Remainers in the run-up to our referendum.
The National Institute of Economic and Social Research has also revised its own figures for growth in the final quarter of 2017 following the release of the manufacturing data. They had previously predicted economic expansion of only 0.5% but have increased that figure to 0.6%, bringing their estimate for annual growth to 1.8%. A far cry from the claims of recession and economic apocalypse that were spewed by the Project Fear campaign.
Former international trade minister Lord Price has revealed that 36 countries are prepared to sign free trade agreements with the United Kingdom following our successful withdrawal from the European Union, highlighting the success of Liam Fox’s efforts to turbocharge UK trade policy as we withdraw from the dysfunctional European customs union. It will enable the UK to continue existing trading relations with third parties as soon as we leave the EU, with many of those nations expressing an interest in hashing out fresh trade deals with the UK once we’re free to negotiate.
Britain is prepared to do just well outside of the EU, even if we don’t score a free trade deal. Freed from the commercial interests and protectionism of 27 other EU countries, we can pursue an ambitious independent trade policy designed for British firms. But the EU can’t walk away from a deal quite so easily. A new report reveals that German car manufacturers alone could lose £3.4bn a year and shed 14,000 jobs if Brussels resists a good deal. The report, put together by Deloitte, showed that more than 42,000 jobs in the sector are linked to British trade and that a loss of access to the lucrative British market could take 5% off of the sector. “A hard Brexit would cause sales of German suppliers to shrink” said Dr Alexander Borsch. We’ve been warning them all along!
It’s no wonder that Europeans are now waking up to the importance of hashing out a generous Brexit deal, with Italian Economic Development Minister Carlo Calenda calling for Britain to be given a “Canada Plus Plus Plus” deal – dubbing it “the minimum that we need to achieve”.
15 December 2017
This week new data from the NIRSR showed Britain outperforming expectations as pay growth picked up and new evidence showed that the importance of EU workers in the tech sector is massively overblown; the UK was shown to be the top developed economy for the establishment of new businesses last year while our ties with China and Japan only got stronger; and British retail was shown to have surged in October and November contrary to early reports, showing that the inflation rate is yet to hit British consumers.
New data from the National Institute of Economic and Social Research suggests that the British economy grew by 0.5% in the three months to November, beating the forecasts of professional economists. Part of the growth is likely down to export activity, with HMRC data showing exports from England from England rising by 14% and exports from Scotland soaring by nearly 20%. This echoes the findings of ONS data which showed industrial output up 1.2% in the three months to October, likely caused by the more competitive exchange rate according to Amit Kara of the NIESR.
As the economy continues to expand following our vote for Brexit, pay growth is on the up too with annual wage growth hitting 2.5% in the three months to October according to official figures. That’s from a previous rise of 2.2%. It shows pressure on wages relaxing as inflation rose only marginally to 3.1%. “We are approaching the point at which the pool of available labour is beginning to become rather small, and I think there is a sense many companies are finding retention problems” said Peter Dixon at Commerzbank. “Accordingly they are going to have to nudge up wage offerings in order to ensure they can maintain their staff, which is important particularly in skills and services-oriented economy.” A pay rise for British workers after Brexit? Finally!
As the labour market is transformed by a long-awaited end to EU open borders, don’t expect a serious skills shortage to develop though. The UK is less reliant on EU workers than many Remainers would like to believe with a new study showing that more tech workers have arrived from India, Australia and the US than from major European Union member states. Government-backed Tech City showed that the British tech sector looks far beyond the confines of the single market for their talent, with English-speaking US and Australia accounting for a whopping 17% of all tech workers arriving in the UK.
New figures have also shown Brexit Britain dominating international competition when it comes to the volume of new businesses established in the country last year. Accounting firm UHY Hacker Young compiled the data, showing the number of businesses in the UK growing by 6% to 218,000 last year. The other major developed economies grew on average by only 2% according to the measure. Only rapidly growing players China, Pakistan, Vietnam, Malta, and India outperformed the UK. “As a range of new sources of funding gain traction in the market and the corporation tax burden lightens, the start-up climate is improving, financial pressures are easing and investment for growth is on the cards” said Daniel Hutson from UHY Hacker Young.
Even Remoaner Hammond is at least looking ahead to some global opportunities for Brexit Britain, even if he’s been pushing in the cabinet for a watered-down fake Brexit which would prevent us from striking trade agreements globally. He’s set to seal $1.3bn worth of trade and investment deals with China during a two-day trip to the rising power. He’ll be taking Mark Carney, LSE CEO Nikhil Rathi, and Business Secretary Greg Clark – underlining the gravity of the event.
And our ties with the East are likely to be improved further by an eager Japan. Yesterday Boris Johnson and Japanese Foreign Minister Taro Kono met and Boris’ Japanese counterpart confirmed that they were seeking a rapid agreement on mutual recognition of standards – one of the few roadblocks to genuinely frictionless trade that Brexit sceptics have often heralded as a key reason for a soft Brexit. The agreements, however, are significantly less difficult to strike than many suspect – and our dealings with Japan may well prove that very shortly. “We believe in terms of mutual recognition, as Taro has just said, we believe that can be readily and speedily accomplished” said Mr Johnson.
British retail is surging too with sales rebounding in November as sales volumes rose by 1.6% on numbers for November 2016. With inflation running slightly above the Bank of England’s target, the rise in volume shows that the inflation rate isn’t hurting British consumers – contrary to the belief of many pitiful Remainer commentators. The new data also showed that an alleged drop in sales in October didn’t actually happen as sales in fact held firm. Andrew Sentence of PwC said that “consumer confidence seems to have recovered from the shocks which hit retail spending earlier this year – rising inflation and increased uncertainty surrounding the Brexit process”. So much for that economic collapse that Project Fear predicted.
8 December 2017
This week the ONS revealed that FDI had surged last year while the UK enjoyed new investment from the biotech sector and digital giant Facebook; and new PMI data showed the UK manufacturing sector surging at its fastest pace in four years with growth across the entire sector and employment on the up.
Official stats released last Friday show Britain enjoying its highest ever net flow of FDI (foreign direct investment) in the year we voted to quit the EU – a sign of confidence from global investors.
The Office for National Statistics revealed that net flows stood at £145.6bn – up from £25.3bn a year prior – with much of the boost coming through equity capital. “Large publicly reported transactions in 2016 included the acquisitions of SABMiller, ARM Holdings and BG Group” reported the ONS.
And the investment doesn’t seem to be stalling. Just this week we discovered that a major US life sciences investment fund is set to plough $1bn into the UK’s booming biotech sector, with the investor planning to move sizable portions of its operations to Britain.
Meanwhile in the tech sector Facebook has opened a new London HQ, creating 800 jobs and confirming that the sectors of the future are still drawn to an independence United Kingdom. “The UK’s flourishing entrepreneurial ecosystem and international reputation for engineering excellences makes it one of the best places in the world to build a tech company” said EMEA VP Nichola Mendelsohn. “And we’ve built our company here – this country has been a huge part of Facebook’s story over the past decade, and I look forward to continuing our work to achieve our mission of bringing the world closer together”.
IHS Markit’s monthly survey of British manufacturing has shown the sector going from strength to strength as Brexit talks move forward, with the Purchasing Managers Index – one of the most reputable measures of private sector activity – showing a rise from 56.6 in October to 58.2 last month. The acceleration sees every part of the sector in good health, with the director of Markit Rob Dobson saying that the sector had “shifted up a gear in November, with growth of output, new orders and employment all gathering pace”.
No wonder factories have gone on a hiring spree, with the survey showing employment in the sector at 55.4 – the fastest rate of expansion since June 2014. So much for that Brexit-induced economic apocalypse! Figures across the survey were at their strongest since 2013, proving that our vote to leave the EU has breathed new life into the economy.
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?