Be ready for a crisis cut

The most disturbing aspect of Britain’s economic stagnation in the final quarter of 2019 is that it didn’t need to happen at all.

If the house of Commons had been more grown up about passing a Brexit bill, rather than undermining business, consumer and global confidence with its fruitless squabbling, output might have grown in the final quarter instead of coming in flat.

Nevertheless, it is not all gloom. expansion in the third quarter was upgraded and output in December, with the election settled, actually showed the first sign of stepping up. Growth in 2019 came in at 1.4pc, ahead of 1.3pc in 2018, and a whisker below the IMF’s 1.5pc latest forecast.

There is no immediate reason to feel too bad. After the shock of the financial crisis of 2008-09 and the subsequent deep slump the UK has gone 11 years without recession. If Gordon Brown were still at the Treasury he might still be talking about abolishing boom and bust.

The country’s record in creating jobs has been outstanding, with the unemployment rate standing at 3.8pc.

That is less than half the 8.4pc jobless rate in France, an economy of similar size to the

UK. Behind the growth figures for last year there are encouraging trends. Data released by the Department for International Trade shows that in spite of Brexit uncertainty, exports from the UK climbed 5pc last year to £689bn. exports to the eU fell away amid the eurozone doldrums.

Lost ground is being made up elsewhere, with UK exports to non-eU countries up 13.6pc. Last year the UK finally seemed to be getting some traction with China, as exports jumped 40.9pc to £26.4bn.

early survey data suggests the ‘Boris bounce’ was in place before the big confidence-boosting infrastructure decisions on 5G mobile networks and hS2.

But there can be no confidence that the optimism is sustainable. In testimony to

Congress, Jay Powell, chairman of the Federal Reserve Board, mildly cautioned that the coronavirus ‘could lead to disruptions in China that spill over to the rest of the global economy’.

With world output fragile, the risk of further slowdown in the first quarter is looking very real. Britain’s decision to give the green light to big capital spending projects together with an already announced 4.1pc lift in spending is a timely fiscal boost.

But if the coronavirus shows no signs of abating we should not discount the possibility of the kind of co-ordinated interest rate cut reserved for crisis.

Floating votes

The London Stock exchange has lost ground to New York, hong Kong and other financial centres in recent times when it comes to initial public offerings.

The UK’s departure from the eU, which led to subdued British share prices, has played a part. But one can’t but feel that in spite of the LSe’s success as a creator of indexes and a data powerhouse, standards have fallen when it comes to offering foreign enterprises a London quote.

The endless shenanigans at miner eNRC, which is in a permanent struggle with the Serious Fraud Office, have been well documented. The black hole discovered in the accounts of Bumi, the Indonesian coal miner brought to the LSe by Nat Rothschild, did little to enhance the reputation of the financier or the LSe.

To this roll of honour we must now add NMC health, where the shares have been in free fall following questions about its financial health and the astonishing disclosure that the share register is riddled with errors about beneficial ownership.

The company’s rent-a-director non-executives have their work cut out sorting this lot out. how they might propose to sell the firm, when no-one knows who really owns it, is beyond parody.

Going global

NORMAL accounting standards do not really tell us how the underlying business is doing at Ocado.

The lesson to be drawn from the full-year results is that the best is to come. The grocery deal signed with M&S in the UK is a great marketing opportunity in terms of prices, choice and quality.

The real value is overseas, with Ocado’s solutions enterprise shortly to start producing the first dollops of income through Casino in France and Sobeys in Canada.

Coles in Australia and Aeon in Japan are joining US giant Kroger in the pipeline.

The best days are ahead.