What happens next ...
Theresa May resigned this week as Prime Minister. The second female Prime Minister but "not the last", it was a tearful end to a short statement outside Number Ten.
The Prime Minister had been visited by head boy Graham Brady first thing in the morning. The game is up, Brady told the Prime Minister, the boys on the back benches have had enough. It really is time to step down and hand over the keys to Downing Street and Chequers.
The Prime Minister had wanted just one more go to secure a Brexit deal though the house. It was never going to happen. Cabinet was in open revolt. Andrea Leadsom resigned from Cabinet this week The Leader of the House was unable to support a deal which "undermined the sovereignty" of this great nation.
The Prime Minister has now set the record for the largest number of ministers lost compared to anyone in recent political history. Margaret Thatcher lost 25 ministers in 4,000 days in office. Tony Blair shed 29 in almost as many days. Theresa May misplaced a record 36 ministers in less than 1,000 days. Not quite the legacy record sought by the MP for Maidenhead.
So what happens next? Boris Johnson remains the favorite to take over the job, with a commitment to leave the EU on the 31st October, with or without an agreement. To be the bookies best bet, at this stage of the race, does not bode well for the former Foreign Secretary. Tory history suggests a fall at the last fence may well be the fate of those first out of the traps.
There will be many seeking the job, which promises to offer a record for the shortest tenure in office. May's successor will take over the impossible task of uniting the Tory party on Europe. Jeremy Corbyn is on hand to ensure cross party support is denied. The odds on election before the end of the year have risen dramatically.
The runners and riders for the challenge are likely to be numerous. Graham Brady has stepped down as Chairman of the 1922 committee, to clear a path for the leadership bid. Spending so much time in Number Ten of late, Brady has clearly developed a fondness for the home decor and the house cat. Odds of 20:1 suggest Brady won't make the Downing Street doorstep.
Dominic Raab is the best bet, behind Johnson of course. Expect the unexpected, the warning in the Times today ... "The front runner seldom wins the laurels, it pays to be a little coy at first".
Coy and the blonde boy ...? Not really! It promises to be an interesting race ...
Retail Sales up 5% ...
Headlines this week ... British Steel and Jamie Oliver's restaurant chain went into administration. "Newsnight" debated why government should consider a bail out for the manufacturing sector and not for the restaurant trade!
Really! Taking Patisserie Valerie and Carluccio's into public ownership doesn't even feature on the Corbyn shopping list. Water and electricity may prove too much for a Labour government to digest, without an additional service charge for Giraffe, Byron and the Gourmet Kitchen bar.
Despite the demise of steel, retail sales in April remained bouyant. Volumes were up by 5.2% in the month. Values were up by 5.5%. Online sales increased by over 10% placing additional pressure on traditional retail.
Headline inflation edged up to 2.1% CPI basis from 1.9% prior month. Service sector inflation increased to 2.9%, Goods inflation a more subdued 1.5%. Vegetables were up by 5%, Electricity and Transport were up by 10%. The April data is a clear warning, inflation remains a potential threat to growth and a constant challenge to a benign monetary policy.
Good news for the Chancellor, borrowing in the financial year 2018/19 was just £23.5 billion. In April, the level of debt creation was just £5.8 billion. That's the lowest start to the fiscal year since April 2007. The full year borrowing last year was the lowest since 2002.
Strong jobs growth reported last week, inflation this week, suggests real income growth continues to support the level of retail sales and household spending. Income growth and VAT revenues are supporting the reduction in government debt. Momentum suggests the economy may well return reasonable growth figures this year. But then there is Brexit, political uncertainty and of course President Trump. Yes "Tariff Man" Trump added to the tension this week ...
"I am a stable genius ..."
"I am an extremely stable genius" the President assured the world this week. Nancy Pelosi is not so sure. The Speaker of the House of Representatives called for an "intervention" by family, friends or staff for the President's own well being.
"I pray for the President of the United States and for the United States of America" the concerned acclaim. It had been another dramatic week in Washington.
Pelosi had accused Trump of a "cover up" stopping short of an obstruction of justice accusation. The statement just hours before a meeting in the White House to discuss spending plans for infrastructure was a wind up which Trump could not resist. The meeting was abandoned within minutes, Trump appeared at the podium before the press pack.
“Instead of walking in happily into a meeting with the Democrats, I walk in to look at people that have just said that I was doing a cover-up,” Trump fumed to the press. “I don’t do cover-ups,” he added. "As everyone will agree, I am the most transparent President in the history of this great country". Transparent as in we can all see though you the reality. There is no doubt Pelosi owns the Trump play book.
Pelosi has mastered the art of triggering a Trump Temper Tantrum. The President cannot resist the bait. A press stunt in the White House to announce a farm bailout worth some $16 billion dollar, was overtaken by a Trump rant about "Crazy Nancy". "She's a Mess, She's lost it" said the leader of the free world.
"I am an extremely stable genius" the President confirmed. Ms Pelosi responded on Twitter ...
"When the extremely stable genius starts acting more presidential, I'll be happy to work with him on infrastructure, trade and other issues". Oh dear, maybe we should all pray for the President of the United States, world peace and an end to trade wars, everywhere ...
That's all for this week, have a great weekend. We will be back with more news and updates next week!
The Saturday Economist
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