Friday 3 August
British engineering is on the up as the UK pivots to the rest of the world. In step is Liam Fox who is accelerating preparations for trade deals with Australia and the Pacific alongside a bilateral arrangement with Washington DC. A deal with India now looks more likely as Delhi’s talks with Brussels collapse. Long-term employment is at a high and the City of London “exodus” is officially declared non-existent.
British engineering not only adds more value thanks to the place it occupies at the very top of precision manufacturing, but it is also global with Brexit posing far more opportunities than risks. Yet another reason why a WTO-based trading relationship with the EU should be taken more seriously.
For UK-listed engineers “there’s a lot more pointing upwards than downwards at the moment,” says analyst David Larkam.
“The market conditions are good. [Whether] aerospace, automotive, consumer electronics or semi-conductors — they all seem to be in a good place at the moment and are needing our products,” said Will Lee, chief executive of booming firm Renishaw.
FTSE 100 conglomerate Smith Group is unusual for seeing a seven percent drop in its share price. A suspension of its medical products by European regulators was at least partly to blame.
International trade secretary Liam Fox hailed a “hugely historic moment for the British people who voted to take back control” as his department launched three consultations for trade deals with Australia, New Zealand and the United States. Another consultation on the Trans-Pacific Partnership, which encompasses trade with the two fellow Commonwealth nations, will also be launched. Although the US chose to withdraw from the TPP, the multilateral trade agreement respecting national sovereignty is a mighty achievement, drawing in Japan, Canada and Mexico.
According to manufacturers organisation EEF, British firms have enjoyed an “exceptional” twelve months of job creation, with the good news not limited to South East, but all regions of the United Kingdom. Long-term unemployment is now the joint-second lowest in Europe, way ahead of comparable economies like France and Germany.
Following a protracted hiatus in trade talks between the EU’s lax trade negotiators and their counterparts in Delhi, a deal is now widely viewed as impossible. India’s commercial relationship with the EU is heavily weighted towards the UK. An arrangement between Brussels and Delhi is pointless if London isn’t involved. Indian negotiators now say attention will switch to Britain. A bespoke trade deal is on the cards.
Uh oh! It seems that once again the fine print of Remainers’ project fear manifesto tells a different story. With the UK unlikely to strike a services arrangement with the EU, allowing financial institutions to so easily sell their services into each others markets, the Remain campaign howled at economic Armageddon, even though, for all its might, British financial services only account for a tenth of economic output and are overwhelmingly focused on the rest of the world, for that is where the growth and investors are.
Deputy governor of the Bank England has ruined that claim, predicting only 5,000 to 10,000 jobs would move across the Channel and the Irish Sea. “I think it will be at the bottom end of that range. If anything, it might be slightly below that,” said Sam Woods. The London Stock Exchange’s former boss, Frenchman Xavier Rolet had ludicrously warned 200,000 jobs would be lost. Meanwhile, Charles Bowman the Lord Mayor of the City of London has placed his estimate at 5,000 to 13,000. 500,000 people are employed in the Square Mile alone.