Britain is bouncing back
AFTER the sound and fury of the last three-and-ahalf years, the Brexit bill became law this week when it received royal assent and was initialled in Brussels. The December 2019 election has already taken uncertainty off the table and the pent-up demand is being released.
The bruised Remain lobby continues to chunter on about this just being the start and there are new trade arrangements with the EU to be secured.
The problem with Brexit was not Leave but the attempt of those who opposed the referendum outcome to turn it back.
The prolonged political turmoil which ensued held back economic confidence and investment, not the act of Brexit itself. Indeed, this led the International Monetary Fund to conclude in October that the dire Leave impacts it had projected were done.
The big surprise is the speed of the rebound. Just a week ago the conventional wisdom was that the economy was in a bad place and Mark Carney’s last duty as governor of the Bank of England would be to cut interest rates.
Anyone listening to Carney carefully will have heard a different message. Firstly he argued the restoration of certainty would unleash business investment. Secondly that monetary policy largely had run its course and that it was time for fiscal policy to take up the slack. Finally, at a time of great flux in global trade, Britain has a chance to reset the dial and clear the miasma.
The forward-looking Purchasing Managers Index climbed to 52.4 from 49.3 in January. It shows the services sector springing back to life and the problems of manufacturing easing. Supporting this data was a survey from the Remain- supporting CBI showing manufacturing optimism surging and a sharp rise in investment intentions.
The labour market continues to be robust in spite of recent high profile job loss announcements at Jaguar Land Rover and Morrisons. Record levels of employment are good for the public finances ahead of the budget. The more people in work, the higher the income tax and national insurance take and the more spending power.
Other signs of optimism come from a recovering housing market helped by intense competition for mortgages.
High Street retailers, such as department store Beales, are faltering. But digital shopping is booming, benefiting established outlets such as Next as well as online fashion firms Boohoo and Asos.
All of this may be a blip, and the global economy is struggling as the IMF revealed in Davos.
But with an expansionary budget on the way, and corporate Britain sitting on a cash pile, there is no reason to think that an interest rate cut is required.
Byte to eat
MUCH bleating from investors about the late intervention of the Competition and Markets Authority in the £6bn bid by Dutch-based Takeaway for Just Eat.
A feature of Britain’s free and easy bids regime is that determined buyers, even those involved in a bidding war, seek to secure control on an expedited basis with a minimum of scrutiny. It has long been my contention that regulators would be advised to put sand in the wheels so that transactions that potentially could be detrimental to the public interest are scrutinised.
The home food delivery market is changing fast and UK players such as Just Eat and Deliveroo have been fighting it out for leadership. Bigger international players are also interested, with Amazon and Uber Eats on the fringes. All of these use high-tech software and logistics to fulfil orders.
The CMA is concerned the Takeaway bid is not what it seems. Instead of it being a total newcomer to the UK it is feared there may have been plans to re-enter the British market. By merging with Just Eat it is removing an effective competitor, reducing consumer choice and awarding itself greater pricing power. The CMA rightly is using its powers to have a look, and a full inquiry might shed some light on a new market.
If big battalion investors and their advisers are made to wait, so be it.
Wrong turn
RED faces at online grocery delivery champion Ocado over foiled plans to park a diesel dump in the company’s Yummy Mummy heartlands of North London.
Founder Tim Steiner is doing well for global Britain.
But he should also respect heritage and safety.