UK defies Trump rumpus
THE much-enjoyed Trump rally, which carried stock markets on both sides of the Atlantic to record levels and lifted the dollar 5pc, has fizzled.
Shenanigans in Washington surrounding Donald Trump’s dealing with the Russians, and the sacking of FBI director James Comey, have even shaken Wall Street out of its rejoicing.
Nevertheless, the Trump effect has not been negligible in lifting confidence in US banking and unleashing oil production. Even the Tory manifesto pronounces Theresa May ready to release the fracking beast.
The biggest victims of the witch-hunt against the White House are the fiscal reforms at the heart of Trumponomics.
At the core of Trump’s programme is the pledge of $1trillion of infrastructure renewal and corporate and personal tax cuts.
Political momentum behind these ideas, designed to raise trend growth above 3pc, has been sapped by the congressional probes into intelligence leaks and failures.
Policy is also being held hostage to passage of a budget, with Republicans divided over issues of increased military spending, rising welfare costs and the path to a reduction in the deficit. The IMF’s World Economic Outlook issued last month was optimistic about a faster global recovery on hopes of an uptick in the United States. Fortunately, the British economy looks to have a mind of its own, Brexit and the general election notwithstanding.
Much of the discussion is around the manifestos, but in the real world of data there is reason to be confident. Job creation continues and the unemployment rate at 4.6pc is at an historically low level. Surveys suggest a second-quarter bounce-back after estimates of 0.3pc growth in the first quarter.
The Office for National Statistics reports that UK retail sales beat expectations in April, jumping by 2.3pc. Spending over the three months to April was the highest since 2002. Analysts at Berenberg point out ‘the risks to consumer from higher inflation are exaggerated’. History, it says, shows that when inflation runs ahead of wages, consumers still open their wallets.
Manufacturing has to play its part. The CBI’s latest survey shows order books at their highest since February 2015 and export orders are robust. Confidence in the UK and worries about political disruption in the US have given a fillip to the pound, which has gained 1pc against the dollar to reach $1.3048 in latest trading.
Retreat from the lows of last autumn are welcome and should ease cost pressure in the supply chains. But we shouldn’t forget that a lower pound is a competitive pound, which is just what the UK needs as its scans the global horizon for trade deals.
Fraud setback
THE rhetoric on the City in the Tory manifesto hits the right note.
However, a key part of clamping down on untrammelled capitalism is dealing with fraud. The Serious Fraud Office under David Green QC has demonstrated it knows how to deliver better corporate justice.
Witness actions against Rolls-Royce and the Libor convictions. It would be bonkers to interrupt the progress made by the SFO by wasting energy on integration with the sub-octane National Crime Agency.
Wrong number
THERE have been three text messages from BT to my private number in the past 24-hours requesting feedback on bill-paying services. My one word response is: Rubbish.
My first step on receiving a ‘final reminder’ for an overlooked broadband invoice was to call the 0800 number provided.
My first effort at 8am produced a message saying the line was closed.
On the second try, two hours later, there was no answer and after a dozen rings the line cut out. I then retreated to BT online payments, but the site refused to accept my account number and later I was informed there was technical fault in the service.
Next stop was a payments phone number, found online. After navigating through voice-activated choices, finally I was connected to a helpful payments person.
Having handed over all my personal details she told me because it was a ‘business’ account that payment could not be taken.
My phone number was requested and I was duly called back ten minutes or so later. Finally, a debit card payment was accepted. From start to finish the process had used up nearly an hour.
Imagine the billing cost for that time if I were a City law firm of the kind BT is using to sort out its Italian disaster.