Amazon backs booming Britain
In a major vote of confidence in Brexit Britain, amazon announced plans last night to build a major technology hub in Cambridge.
The development centre for more than 400 scientists, engineers and mathematicians is expected to open this autumn.
It will increase the number of technology experts amazon employs in the city to 550 as it steps up investment in its voice-activated Echo speaker and Prime air delivery drones.
The news – a major boost for Theresa May as she locks horns with European Commission president Jean-Claude Juncker over Brexit ahead of the general election – came as figures showed the British economy was picking up pace.
Welcoming the amazon investment, digital and culture minister Matt Hancock said: ‘This is fantastic. amazon’s increased investment is another vote of confidence in the UK as a world-leading centre of invention and innovation.’
Jeff Wilke, amazon’s chief executive of worldwide consumer retail, told the Financial Times: ‘The UK is such a great place to recruit. For us, it’s a place we will continue to invest in heavily.’
amazon has invested £6.4billion across the UK since 2010 and has pledged to create 5,000 jobs here this year, taking its full-time workforce to 24,000.
It came as it emerged the economy has bounced back strongly after slowing at
the and start construction,of the year. plusa reboundthe best in manufacturing services performance for three years, put Britain on course for growth of 0.6 per cent in the second quarter of the year.
This is twice the 0.3 per cent in the first three months, according to research group IHS Markit, whose index of activity in the services sector – in which scores above 50 show growth – rose from 55 in March in 55.8 in april, the best this year.
In addition, the pro-EU Confederation of British Industry said export orders at small and medium-sized manufacturers were rising at their fastest since 2011.
Chris Beauchamp, from the City trading firm IG, said: ‘Juncker can bluster all he likes, but the UK sails ahead.’
BRITISh tech-tyro Imagination has been bullied by Apple into taking some bold steps to save itself from the knacker’s yard.
But how wise it is to take on Apple by invoking a dispute procedure that could end up in the courts is debatable.
The US giant is well on its way to becoming a trillion-dollar outfit, having seen its value soar 27pc so far this year to $774bn.
Indeed, even before anyone has seen the next generation iPhone, Apple shares constitute a whopping 15pc of the Standard & Poor’s 500 technology index. With valuations among the big tech stocks heading towards $5 trillion, lifted higher by Facebook’s 47pc revenue boost overnight, the power of Silicon Valley has become irresistible.
When someone suggested to Apple boss Tim Cook that the clunky Apple watch may not have been the great breakthrough hoped for, he shot back noting that with revenues of $5bn to $6bn it could already be in the S&P 500 as an independent enterprise.
All of this illustrates the scale of the task which Imagination (in which I hold shares) finds itself.
Apple is no stranger to patent disputes and has been in almost permanent war with rival Samsung. It even boasts to have gone to court and won against the FBI when the authorities demanded a back door key into the iPhone as part of the inquiry into the San Bernardino killings in 2015.
Imagination has few other choices than to seek remedies from Apple, which is among its biggest shareholders and supplies 50pc of its revenues.
The solution it is proposing to keep itself afloat is to jettison other parts of the enterprise. It wants to sell two promising divisions – the embedded processor unit MIPS and the Ensigma mobile offshoot. When companies embark on panicky sales of key units, you fear the end is nigh.
This was the strategy followed by hMV as it headed for insolvency.
What Imagination really needs now is to sell itself as a whole to smart managers (such as those at engineering group Melrose) who know how to invest in and rebuild underperforming enterprises in double quick time and find a better home for them.
It would be unfortunate if, as a result of ineptitude at the top, Imagination is allowed to embark on a slide to oblivion.
Spanish shadow
FIRST-quarter numbers from hSBC showed a bank prospering in a faster growing global economy. Adjusted profits at £4.6bn for the first quarter were 12pc up and the group’s refocus on its traditional hinterland in China is paying off.
But as so often for the banks, the past continues to haunt. hSBC has been through hell and back in the US because of money laundering at its former Mexico subsidiary. Now the Spanish high Court has moved against it as a result of a money laundering case triggered by the whistle-blower hervé Falciani. he has exposed all kinds of nastiness funnelled through hSBC’s Geneva private bank. Court documents in Spain show that two former heads of private banking, Chris Meares and Clive Bannister, are under scrutiny as suspects. The former chairman of the private bank, Peter Widmer, also has been named.
Meares already has testified before the Commons over alleged tax avoidance by hSBC’s private bank. The Spanish intervention will be a cause for anxiety among investors in the quoted ‘zombie’ insurer Phoenix, where as chief executive Clive Bannister is credited with a good job.
Erasing a rancid decade will be a key task for Mark Tucker when he slides into the chairman’s seat at hSBC in October.
Hat-trick or own goal?
CITY analysts hailed this week’s strong business surveys as evidence the UK will resume strong growth in the second quarter.
‘A hat-trick of strong purchasing managers indexes,’ said the EY Item Club which uses the same model as the Treasury.
‘The sharpest rise in business activity since December 2016,’ according to Markit/ Cips, which collects the data. ‘Good news at the start of Q2,’ say Berenberg. Goldman Sachs calculates Britain is expanding at a sturdy 2.2pc clip.
All of this is somewhat different to how the economy is seen through the lens of the London Evening Standard, now edited by George Osborne who this time last year occupied Number 11.
‘Gloom over mortgages, car sales as inflation hits the consumer,’ noted the headline across a double-page spread. You pays your money and makes your choice.