The Prime Minister was in Davos this week. A keynote speech, "So what can I say" or "what did she say", more to the point?
Not much, according to Janet Daley in the Telegraph. "It was a classic speech of the May genre, it said nothing. Her peroration was so platitudinous as to be utterly meaningless". Ouch. "If you look at the newswires from other countries around the world, they’re all talking about Macron, Modi and Merkel not May". [Trump, still to come, was to be the closing act on Friday]
Ah yes, platitudinous peroration, perfectly positioned to avoid the delicate issue of Brexit. Brexit is rapidly becoming "Brexit, the policy that dare not speak its name". Lord Alfred Douglas and Oscar Wilde would be proud. Theresa May has abandoned preparations for a third high profile speech on Brexit next month. Why?
For fear of widening cabinet and back bench splits on Britain's future relationship with the EU. No thought to businesses up and down the country, desperately looking for clarity on what we are hoping to achieve.
Philip Hammond suggested changes to the UK-EU relations could be very modest post Brexit. The Chancellor received a rap on the wrist from Downing Street for his modesty. David Davis claimed there was no difference between him and the Hammond. Hammond's comments provoked "fury" on the back benches. Jacob Rees-Mogg accused the government of adopting "a timid and cowering" approach to the talks.
Rees-Mogg an iconic item of Victorian memorabilia, plays the rôle of Palmerston. "Implementation not transition" the mantra for the post Brexit period. No new regulations or new laws from the ECJ or we "send the gunboats". Ah yes, a big old stick waving an old big stick. Someone should point out we have no landing craft to get the marines on the beach and we will have to wait some time for Boris's Bridge across the channel, if we are going to make the trip.
Matthew Parris in The Times today, suggests one well aimed speech could topple the Prime Minister. Nick Boles had a go this week. A speech in which he called the Prime Minister "timid". According to reports, about forty Tory MPs have now written to Graham Brady, Chair of the 1922 committee, to express their lack of confidence in Theresa May. Just eight more and he will be forced to launch a vote of no confidence in the Prime Minister. Brady himself is getting nervous. He is advising MPs to "think carefully" before putting pen to paper. "Just do it" the Nike mantra and probably the best way forward. Anything is better than this condition of "anarchic anomie" ...
A conscious recoupling ...
The UK can “consciously recouple” with an accelerating global economy this year, according to Bank of England governor Mark Carney.
"The UK economy could start to grow in line with the global economy if more clarity about the UK’s relationship with the European Union emerges from Brexit negotiations." he said. It was a (not so) subtle hint to government.
Gwyneth Paltrow had coined the phrase. The Governor gave due credit. Paltrow had been talking about her divorce ... her conscious uncoupling. “I wanted to turn my divorce into a positive,” “What if I didn’t blame the other person for anything and held myself 100% accountable? What if reminded myself about the things about my ex-husband that I love. What if I fostered the friendship?” A form of conscious re coupling.
"Not Implementation, Not Transition, but "Fostering the Friendship" a "Conscious Re Coupling" under the broad church of the European Court of Justice." Moog Music to business ears! Mogg cacophany on the back benches. So what was the Governor talking about ...
World trade grew by an over 5% in the third quarter of 2017. World growth will be almost 4% this year. The EU and the US grew by 2.3% last year. The UK grew by 1.8%. According to the latest data from the ONS. Growth slowed to 1.5% in the final quarter, despite a strong performance from manufacturing and business services. The figures could well be revised up. We expect a similar performance in the overall economy in 2018 despite the continuance of platitudinous perorations about our future with the EU.
Did the economy really slow in the final quarter? The jobs market and the borrowing figures suggest not. In the latest data for the quarter, employment and vacancies increased, unemployment fell. Earnings increased by 2.5%. Vacancies increased to 810,000. Unemployment fell to 1.439 million a rate of 4.3%. With recruitment difficulties becoming more acute and the UV ratio at an all time low, something has to give on wage rates. Either the ONS is already under recording the real level of earnings in the economy, or wage rates are set to rise this year as we have long expected.
Government Borrowing would put a smile on the Chancellor's face, despite the rap on the knuckles from the Prime Minister over Brexit. Public sector borrowing fell by £6.6 billion to £50.0 billion in the current financial year-to-date compared with the same period in 2016.; this is the lowest year-to-date net borrowing since 2007. In December, borrowing fell by £2.5 billion to £2.6 billion helped in part by a £1.2 billion credit from the European Union. Oh the delicious irony!
The Office for Budget Responsibility (OBR) forecasts that public sector net borrowing (excluding public
sector banks) will be £49.9 billion during the financial year ending March 2018, an increase of £3.9 billion
on the out turn net borrowing in the financial year ending March 2017. The projection appears to be pessimistic. £42 billion seems a reasonable extrapolation, down from £46 billion last year ...
More next week ...
The Saturday Economist
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