Confidence boost for UK
Talking Britain down is such a feature of the national narrative that it is becoming almost impossible for Prime Minister Rishi Sunak to turn the political tide. Truth is that the Uk has bounced back from the ‘Truss tantrum’ faster than anyone could imagine and confidence in the country’s prospects are improving.
Forget Horizon and systems failure at the Post Office. The Uk is an early adopter of generative ai and some 42pc of chief executives tell audit firm PwC that they have embraced the technology in the last year.
Britain is a pioneer in ai and continues to be so with Deep Minds (owned by alphabet) working on a pharma spin-off which could speed work on drugs discovery.
information group Relx and software developer Sage are both demonstrating how ai transforms what they do.
There has been much negativism about foreign direct investment in the Uk postBrexit. Yet the PwC chief executive survey finds that 32pc of american bosses regard Britain as the top target to invest.
in spite of concerns about the security of Chinese inward investment, the PwC survey shows our nation has rocketed up the league table to sixth-best place for Beijing to invest from 16th last year. PwC boss kevin Ellis notes the Uk’s standing on the world stage is ‘pretty resilient’. That’s better than European Central Bank president’s Christine lagarde’s forecast that Brexit would be ‘pretty bad, to very bad’.
it is not just chief executives changing their minds. Housing has been a driver of growth in the Uk. Property consultant knight Frank have done a reverse ferret.
last year, it forecast a 4pc subsidence in 2024 house prices. inflation and home loan costs have retreated more quickly and it now sees a 3pc advance in values this year. agents Rightmove report that 2024 prices are off to the fastest start since 2020.
The improving outlook is not yet feeding through to housebuilders. Crest nicholson has issued its third warning about future profits because of rising costs. in spite of its difficulties, and some speculation that it could become a bid target, Crest reports more customer inquiries, as mortgage rates head down.
Crisis, what crisis?
Howard’s way
THE exploits of alan Howard, co-founder of investment fund Brevan Howard, continue to fascinate.
in the latest financial year, Howard and associates collected a £268m pay-out after profits at the £28bn fund quadrupled.
Brevan Howard takes big macro bets on the global economy and benefited last year from getting it right on interest rates.
it would be nice to think that the fund saw its mission as an investor in Britain’s startup economy. instead, it is a big backer of digital, crypto and non-fungible tokens. Playing these markets clearly can be rewarding. and Howard, as a generous backer of the Tories and charitable causes, at least gives some money back to civil society.
One wonders whether Brevan Howard ever reflects on the less desirable uses of digital currency. The implosions at FTX and Binance last year exposed digital currencies as a playground for criminality and terrorism. Hamas and Hezbollah collect funds through digital wallets. Both the US Department of Justice and israeli authorities are caught up in a game of whack-a-mole: as soon as one conduit is hammered down another pops up.
last week, backers of bitcoin and other digital currencies celebrated when the US Securities & Exchange Commission reluctantly gave assent to the launch of exchange traded funds (ETFs) allowing easier retail access to digital currency delights.
not all fund managers have bitten into the poison apple. Vanguard, number two in the world with £5.5 trillion of assets, is standing above the fray. Crypto does not conform with its focus on a well balanced portfolio of ‘equities, bonds and cash’. Well said.
Second coming
THE arrival of former Tesco chief executive Dave lewis at private equity outfit Clayton, Dubilier & Rice is a coup.
CD&R has struggled with its £10bn top of the market purchase of supermarket group Wm Morrison which has lost grocery share under current ownership. lewis is tasked with doing a ‘consumer services’ deal.
His experience of turning around Britain’s biggest supermarket chain should be useful to another former Tesco boss Sir Terry leahy, who chairs Morrison.
let the fightback commence.